New York's joblessness spiked a year ago when much of the state shut down to contain the spread of COVID-19, resulting in billions of dollars in unemployment benefits being paid out.
Now, state lawmakers are pushing to exclude unemployment benefits from taxable income in New York in line with federal policy.
“The ‘Empire State’ is fast becoming the ‘Empty State’ because New York leads the nation in high taxes," said Republican Sen. Jim Tedisco. "Those who faced unemployment this past year through no fault of their own due to the pandemic have been struggling to pay their mortgages, put food on the table and provide for their families. They should not have to pay state taxes on the first $10,200 of their unemployment insurance when the federal government is giving them an income tax exemption on the same benefit."
Tedisco estimates the measure would translate to $10,200 in tax relief.
About 4.6 million New Yorkers received unemployment and enhanced pandemic unemployment benefits since the start of the crisis last year.
California, New Jersey, Oregon, Delaware, Pennsylvania, and Virginia are among the states that exclude unemployment aid from taxable state income.
“The COVID-19 economic shutdown has already taken an enormous toll on thousands upon thousands of hard-hit unemployed New Yorkers and their families and communities," said Sen. Tom O'Mara. "New York State needs to follow the federal government’s lead and provide a badly needed exemption from state taxes. We can’t keep piling financial burden upon financial burden and expect workers to ever get back on solid ground again."