Last week, the House unanimously passed House Bill 285, which ‘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 Senate joined them yesterday, passing the bill unanimously as well. The Governor will likely sign it today.
Sponsored by and Rep. Ed Osienski and Sen. Jack Walsh, House Bill 285 would provide more than $25 million in tax relief over two years to local companies and state residents who were forced out of work by the ongoing public health crisis.
Specifically, the legislation would exempt unemployment benefits paid in 2021 from Delaware state income tax, maintain the new employer tax rates at 2020 levels, and reduce the unemployment tax assessment rate for merit-rated employers to the lowest of their earned rates for 2020, 2021 and 2022. The General Assembly passed legislation to provide another $25 million in unemployment tax relief last year.
A record number of Delawareans have filed for unemployment during the pandemic. The state Division of Unemployment Insurance processed more 185,000 claims each of the past two fiscal years, nearly six times the claims received and processed in 2019. Since March 2020 through December 2021, the Division paid 107,195 people more than $1.5 billion in unemployment insurance benefits, compared to about $67 million in 2019.
Federal pandemic benefits expired in September, reducing the assistance being provided to these families.
|House Bill 285 Sponsors||Yes Votes||No Votes|
|Osienski, K.Williams, Brady, Lambert, Longhurst, Matthews, Mitchell, Morrison, Wilson-Anton, M.Smith, Ramone||House Passes 40-0-1. 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 S.Moore Schwartzkopf Wilson-Anton Briggs King Collins D.Short Dukes Gray Hensley M.Smith Morris Postles Ramone Shupe Smyk Spiegelman Vanderwende Yearick||Mitchell (Absent)|
|Walsh, Poore, Gay, McBride, Townsend||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|
|Current Status:||Signed by Governor|
Senator Walsh: “Thankfully, most – but not all – of the hard-working Delawareans who lost their jobs during the pandemic have returned to work, but the financial burden of those lost wages still remains. Exempting the unemployment benefits they received in 2021 will help return some of that money to their pockets, while helping businesses avoid the added tax burden will hopefully make up for some of the revenue they lost during the winter surge.”
Rep. Osienski: “During this pandemic, thousands of hard-working Delawareans lost their jobs through no fault of their own. Although many have returned to work or found new jobs, they are still struggling with the financial difficulties brought on by being unemployed. We owe it to those impacted by the pandemic to take whatever action we can to ease their burden. 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. We also have numerous businesses that already have faced monumental challenges during the pandemic, so we want to be sure they aren’t penalized with higher taxes or face even more difficulties related to unemployment claims. This bill will protect both residents and businesses as we continue to navigate this ongoing pandemic and its lingering effects.”