HOW THE ONE BIG BEAUTIFUL BILL WILL IMPACT SENIOR CITIZENS EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON Executive Vice President NMBA In 2020, on behalf of the NMBA, we asked former Representative Daymon Ely to introduce legislation to exempt federally taxable social security retirement income from state personal income tax. Although the bill did not pass, it sparked much discussion in and out of the state capital concerning the fairness of imposing the tax on senior citizens. New Mexico began taxing Social Security benefits in 1990. Frankly, many suggested that you do not realize that both the feds and the state tax Social Security until you are eligible for benefits. After 2020, there were several attempts by legislators to repeal the tax. In 2022, the Legislature did revise the tax, so currently, Social Security income is exempt from state income tax for individuals with income of less than $75,000 for married filers filing separately, $150,000 for heads of household, surviving spouses, and married filers filing jointly, and $100,000 for single filers. We are proud that the NMBA got the debate started on this issue to protect our state’s senior citizens. This year, Congress and the executive branch have raised a number of issues impacting seniors. In July, President Donald Trump signed the sprawling One Big Beautiful Bill (OBBB), a 900-page piece of legislation that will impact Americans in a variety of ways. Seniors, in particular, will be acutely affected, both positively and negatively. It’s difficult to get the whole picture of any piece of legislation until it’s fully implemented, but we will attempt to paint as clear a picture as possible at this early stage regarding its implications for seniors. On the positive side of the ledger, under the OBBB, millions of taxpayers aged 65 and older receive a break for tax years 2025 through 2028. According to AARP, “You must be at least 65 years old by the end of the tax year and have a modified adjusted gross income (MAGI) of less than $175,000. If you’re married and filing a joint return, your spouse can also claim the deduction if they’re 65 or older and your combined MAGI is less than $250,000.” The deduction is for $6,000 per eligible taxpayer and $12,000 for married couples filing jointly if both spouses are 65 or older. The deduction is reduced by 6% for MAGI exceeding $75,000 ($150,000 for a couple) and can’t be claimed if it exceeds $175,000 ($250,000 for a couple). As for the much-ballyhooed possible end to the taxation of Social Security, the new law contains no provision ending that tax or changing how those taxes are calculated. That’s not the only bit of bad news contained in OBBB for seniors; there are multitudes of changes to Medicare, Medicaid, SNAP benefits and other programs that will be hugely detrimental. As AARP details, “The legislation imposes new documentation requirements on the roughly 5.5 million adults ages 55 to 64 who have an ACA plan. “Those changes will add more red tape for enrollees and further drive down coverage,” according to AARP Chief Advocacy and Engagement Officer Nancy Leamond in a letter to Senate leaders. OBBB also creates work requirements designed to disqualify people from enrolling in Medicaid and creates a massive amount of red tape to prove compliance. Obviously, this affects the millions of Medicaid recipients under 50 years old, but also affects 6
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