House lawmakers pass bill waiving taxes on unemployment benefits | Delaware First Media
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House lawmakers pass bill waiving taxes on unemployment benefits

Jan 21, 2021

Unemployment recipients in Delaware are a step closer to getting a break on their 2020 taxes.


Over 100,000 people were on unemployment last year, many because of the COVID pandemic. And House lawmakers unanimously passed a bill Thursday that would waive their state taxes on those benefits

The bill’s co-sponsor, State Rep. Ed Osienski (D-Brookside), says not paying those taxes will allow those who need help to put their unemployment benefits toward necessities not taxes.

"Exempting unemployment benefits from state taxes would keep approximately $21 million dollars in the hands of more than $100,000 Delawareans who have filed for unemployment last year," said Osienski. "This will allow them to use that money to pay rent, utilities, and groceries."

State Rep. Ruth Briggs-King (R-Georgetown) says the measure is simply a matter of fairness to those struggling during the pandemic.

"So many of our employers as well as our working Delawareans have been hit hard through no fault of their own, and while the unemployment may be a portion of the salary they are earning, they've lost benefits. They've had many other costs they have incurred. And it just does not seem fair to tax them on it," said Briggs-King.

Delaware unemployment recipients will still be on the hook for federal taxes.

The legislation will also keep the new employer assessment rate, average industry assessment rate, and average construction assessment rate at the same level as 2020 to avoid increases because of increased  unemployment claims due to COVID.

This will benefit 2,000 businesses.  Holding the new employer rate at 1.8 percent saves employers up to $264 per employee. Holding the construction rate at 2.3 percent will save employers up to $165 per employee this year. 

The legislation now heads to the state Senate. Gov John Carney supports the measure.