The House Appropriations and Revenue Committee has approved HB 58, a measure sponsored by State Representative Regina Huff which would restore the pension income tax exclusion back to $41,000.
As part of the tax reform package that passed during the 2018 legislative session, the first $31,000 that individuals receive from their pensions are not taxed. Previously, the first $41,000 was not taxed. The House of Representatives overwhelmingly voted to raise the exemption back to $41,000 late in the 2018 session, but that measure was not acted on by the Senate.
Huff, a retired teacher from Whitley County, sponsored and presented HB 58 before the House Appropriations and Revenue Committee.
“Restoring the original $41,000 exemption is the right thing to do for so many of our dedicated public servants who spend a lifetime educating our children,” Huff said. “Many of my fellow teachers and other public employees have asked me to support a bill raising the threshold for state taxation of pensions, and I was honored to turn their concerns into legislation and begin moving it through the process.”
The legislation is retroactive, meaning that any taxes paid on income between $31,000 and $41,000 would be refunded to individuals by the Department of Revenue.
HB 58 now advances to the full House for consideration. Click here to read the bill in full.