By Bob Katzen
The House 157-0, Senate 40-0, approved and sent to Gov. Charlie Baker a bill that supporters said will stabilize the state’s unemployment system and provide targeted tax relief to employers and workers.
Provisions exclude Paycheck Protection Program (PPP) loans from being taxed by the state in 2020; exclude $10,200 of unemployment compensation received by an individual with a household income of less than 200 percent of the federal poverty level from gross income for tax purposes; and create a mechanism ensuring all employees will be able to access 40 hours of paid sick time for any COVID-related issues, including testing positive, needing to quarantine or caring for a loved one.
Other provisions waive penalties on unemployment insurance taxes; freeze unemployment insurance rates paid by employers and extend the state’s tax filing deadline from April 15, 2021 to May 17, 2021. Businesses would also face a new surcharge, in the form of an excise tax on employee wages, through December 2022 to help repay interest due in September on the federal loans.
“With more people getting vaccinated by the day, and our economy re-opening, this bill will bring much needed relief to small businesses, keep our essential front line workers safe, and target tax relief to lift up low-income families who lost jobs during this pandemic,” said Senate Ways and Means chair Sen. Mike Rodrigues (D-Westport).
“I’m proud to join my colleagues in supporting legislation that seeks to ease the economic burdens brought on by the pandemic,” said Rep. Bill Driscoll (D-Milton), House chair of the Committee on COVID-19 and Emergency Preparedness and Management. “The Legislature has a commitment to the commonwealth’s workers, and I am glad to see funds go to those who need it most during these challenging times.”
“I am proud to vote for legislation that will support workers and advance an equitable recovery,” said Sen. Jo Comerford (D-Northampton), Senate chair of the Committee on COVID-19 and Emergency Preparedness and Management. “In Western Massachusetts, main street businesses and nonprofits are the foundation of our economy and rightfully targeted for relief in this bill.”
“The House and Senate enacted legislation to make important updates to our state’s Unemployment Insurance Trust Fund, which has provided an economic lifeline for so many families in need,” said Rep. Josh Cutler (D-Duxbury), House chair of the Committee on Labor and Workforce Development. “Our actions today will prevent a sharp increase in rates on our businesses, help stabilize the fund over the longer term, provide tax relief to lower income jobseekers and ensure that needed jobless benefits continue to flow.”
“Massachusetts employers faced a significant increase in their unemployment insurance costs, with employers’ experience rates scheduled to jump from $539 to $858 per worker this year,” said Republican House Minority Leader Rep. Brad Jones (R-North Reading). “This legislation mitigates that increase by freezing the rate schedule. Restaurants and small businesses, already struggling financially during the COVID-19 pandemic, secured federal Paycheck Protection Program loans to keep their businesses afloat and save employees’ jobs during the pandemic faced a collective tax bill of $150 million. This legislation will make sure their forgiven loans will not be subject to state taxes.”
“Hundreds of thousands of people received benefits last year without taxes being withheld,” said Sen. Pat Jehlen (D-Somerville), Senate chair of the Committee on Labor and Workforce Development. “They have no idea that they owe taxes on those payments and are going to be hit hard in April. The bill will give them more time to pay taxes owed, eliminate usual penalties, and most importantly create a tax exemption for our most vulnerable families.”
“Over the past year, thousands of Massachusetts workers have lost pay, or even lost their jobs, because they needed to stay home from work due to COVID symptoms, or to recover after receiving a vaccine,” said Steve Tolman, President of the Massachusetts AFL-CIO. “Countless other workers have gone to work even when they might be sick because they can’t afford not to get paid. Workers need Emergency Paid Sick Time today, and we urge Gov. Baker to sign this critical legislation immediately.”