Jobless workers would be exempt from paying taxes on thousands of dollars in unemployment benefits under a bill backed by a group of Senate Democrats.
The Coronavirus Unemployment Benefits Tax Relief Act, introduced February 2 by Democratic Whip Richard J. Durbin of Illinois, would waive federal income tax on the first $10,200 in unemployment benefits received in 2020. Durbin introduced an identical bill in September 2020.
The bill is intended to prevent unemployed workers from facing “an unexpected tax bill, which could put them into further economic peril this April,” said Rep. Cynthia Axne, D-Iowa, who introduced a companion bill in the House.
The relief would apply to both traditional unemployment benefits received from state funds and federal unemployment programs created because of the coronavirus pandemic, like Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation.
A similar bill was passed in 2009 during the Great Recession, according to a release.
“As we grapple with the economic pain of this pandemic, the bill I’m introducing today with Rep. Axne would provide tax relief to unemployed Americans so they can spend their benefits supporting their families and their communities,” Durbin said in the release.
The bill is cosponsored by Finance Committee members Robert Menendez, D-N.J., Catherine Cortez Masto, D-Nev., and Elizabeth Warren, D-Mass. It would need some Republican support to pass the Senate unless Democrats add the provision to a budget reconciliation measure, which would require only 51 votes to pass.