By Bob Katzen
Governor Baker signed into law a bill that supporters said will stabilize the state’s unemployment system and provide targeted tax relief to employers and workers. The governor also returned some sections of the bill with amendments which the Legislature will consider.
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.
“Today we are pleased to continue that partnership [with the Legislature] signing into law several key initiatives to support the commonwealth’s employers and employees who have been faced with unprecedented challenges as a result of the pandemic,” wrote Gov. Baker in a letter to the Legislature. “This legislation takes a thoughtful and comprehensive approach in delivering critical relief to facilitate economic recovery for the people of Massachusetts.”
“Since the start of the new legislative session, my colleagues and I have been working together to put forward a bill to address these important issues and I am proud to say that we have delivered,” said Sen. Patrick O’Connor (R-Weymouth). “People should not have to choose between putting food on the table or potentially risk spreading COVID-19 even further. Likewise, small businesses and residents should not be punished for accepting help when they needed it the most.”
“These measures will offer much need relief to workers, employers and small businesses,” said Rep. Josh Cutler (D-Pembroke), House Chair of the Committee on Labor and Workforce Development. “At the same time, we’re also taking critical steps to help safeguard our unemployment insurance system for the long term.”
“This legislation offers many important benefits for employees as well as small business owners,” said House Minority Leader Brad Jones (R-North Reading). “Massachusetts workers will now have access to COVID-related paid sick leave and many lower-income individuals who collected unemployment will see their tax liability reduced. By mitigating the impacts of unemployment insurance rate increases and waiving state taxes on forgiven Paycheck Protection Program loans, this bill will also protect small businesses still struggling from the fallout of the pandemic from what would have been a devastating financial hit.”
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