When Sandy Hunter retired from her job in the Social Security Administration, she knew she would receive none of the benefits on which she built her career.
As a federal employee, Hunter did not pay into Social Security — but her husband did. At 73 years old, Hunter says those Social Security benefits are an essential part of her family’s joint income.
And if Gov. Spencer Cox gets his way, that essential income for thousands of Utah’s seniors could mean a little bit more this year. But first, the Legislature will need to agree to the governor’s wish.
Eliminating income tax on Social Security benefits is a key pillar of the governor’s $30.6 billion fiscal 2026 budget proposal, and “easily the most popular proposal” he’s made in four years, Cox told the Utah Taxpayers Association Tuesday morning at its legislative outlook conference. It’s what Utah needs to do to prepare for the “silver tsunami,” he said.
Eliminating the state social security tax would save Hunter’s family, and roughly 150,000 other Utah households, close to $1,000 per year.
“It can really make a difference,” Hunter said. “We would be really happy about it.”
Close to 450,000 Utahns receive some Social Security benefits, according to U.S. Census Bureau data and the AARP, but senior citizens in lower-income households — those who earn $75,000 or less as a couple, or $37,000 or less as an individual — qualify for full tax credits.
Cox’s proposal would impact around 152,000 taxpayers, according to the tax commission.
Cox, in his pitch to the Utah Taxpayers Association Tuesday, said the proposal is “one of those rare” ones “where people who don’t get any benefits are also excited” about it. The Legislature, which creates and passes Utah’s annual budget, will decide this session whether or not to grant Cox’s wish in the fiscal 2026 budget.
But while the idea may be “politically popular,” some lawmakers, like Riverton Republican Sen. Dan McCay, said they are skeptical of the proposal. McCay told the tax association that he’s wary of proposals that “carve aside” savings for “special groups” and those that potentially increase the tax burden for other Utahns.
“I’ve always believed in a broader base and a lower rate,” McCay said during Tuesday’s conference. “It’s better for the economy and better for taxpayers, and it’s more transparent … that’s why I’m a little bit concerned about the push to completely withdraw the tax on Social Security.”
Instead, some lawmakers have proposed tax rate reductions and income threshold expansions for tax credits.
One proposal for the upcoming 2025 general legislative session, HB130, looks to change the income threshold to qualify for a full income tax credit on Social Security from $45,000 to $54,000 for single people, and from $75,000 to $90,000 for couples. Another bill, HB106, wants to cut the state income tax rate from 4.55% to 4.45%, which would cost roughly $160 million, said Utah State Tax Commission Chair John Valentine.
Cox told the crowd Tuesday he supports additional tax cuts “if we can fit it in the budget,” and reminded attendees that his administration approved the largest tax cuts in the state’s history — a total of around $1.2 billion in four years.
“We got to do that because of the decisions that were made by previous administrations and previous legislatures,” Cox, a former lieutenant governor, said, “and, more importantly, by the private sector who have invested in our state and by the people who work here and work so hard.”
The 2025 legislative session begins Tuesday, Jan. 21.
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
