Unemployment Tax Relief Bill Passes

The Senate unanimously passed House Bill 65 yesterday, sending the bill to Governor Carney for his signature. The bill ‘provides COVID-19 related relief to both claimants receiving unemployment benefits and employers who are assessed unemployment taxes, and extends the end date of the Secretary of Labor’s COVID-19 related rulemaking authority’. 

The bill is expected to save Delawareans roughly $21 million this year by subtracting all unemployment benefits received in calendar year 2020 from federal adjusted gross income, which is used to calculate state personal income taxes.  More than 100,000 Delawareans filed for unemployment benefits last year and will qualify for the exemption. Although the unemployment rate has fallen in recent months, thousands of residents are still unable to secure a job during the ongoing crisis.  

The bill also provides tax relief to employers by freezing employer assessment rates at 2020 levels. According to the Division of Unemployment Insurance, thousands of businesses will benefit from the freeze. Those paying the new employer tax rate of 1.8% will save an estimated $264 per employee in 2021. 

HB 65 Sponsors	Yes Votes	No Votes
Osienski, Bush, K.Williams, Schwartzkopf, Longhurst, Mitchell, Matthews, Baumbach, Bennett, Heffernan, Morrison, K.Johnson, Cooke, Wilson-Anton, Briggs King, Carson, Dorsey Walker, Kowalko, M. Smith	House Passed 41-0 – Baumbach Bennett Bentz Bolden Brady Bush Carson Chukwuocha Cooke Dorsey-Walker Griffith Heffernan K.Johnson K.Williams Kowalko Lambert Longhurst Lynn Matthews Minor-Brown Mitchell Morrison Osienski Moore Schwartzkopf Wilson-Anton Briggs King Collins D.Short Dukes Gray Hensley M.Smith Morris Postles Ramone Shupe Smyk Spiegelman Vanderwende Yearick	None
Walsh, Paradee, Poore, Townsend, Brown, S.McBride, Hansen, Sokola, Wilson	Senate Passed 21-0 – Brown Ennis Gay Hansen Lockman Mantzavinos Paradee Pinkney Poore S.McBride Sokola Sturgeon Townsend Walsh Bonini Hocker Lawson Lopez Pettyjohn Richardson Wilson	None
Current Status –	Sent to Governor Carney

“This pandemic has pushed countless Delaware families to the brink and we need to do everything we can to help them keep food on the table and a roof over their heads,” said Sen. Jack Walsh, the lead Senate sponsor of HB 65. “The tax relief provided in this bill is straightforward and effective. It will keep money in the pockets of those who need it most. I’m glad we could get it drafted and passed in short order to start the year, especially with tax deadlines rapidly approaching, and I am happy to see it pass unanimously in both chambers.” 

“Thousands of hard-working Delawareans have lost their jobs during the past year through no fault of their own, putting them in a difficult position at one of the worst times possible. We owe it to those impacted by the pandemic to take whatever action we can to ease their burden,” said Rep. Ed Osienski, the lead sponsor of the bill. “Exempting the unemployment benefits that have been a lifeline to so many families will mean that they aren’t blindsided when they file their state taxes this year, keeping a little more money in their pockets. We’re also taking steps to protect businesses so they aren’t penalized with higher taxes during the pandemic, which hopefully will help them keep their doors open.”