13 States Won’t Let You Claim Biden’s $10,200 Unemployment Tax Break

Mandatory Credit: Photo by Stefani Reynolds/UPI/Shutterstock (11836988r)U.
Stefani Reynolds/UPI/Shutterstock / Stefani Reynolds/UPI/Shutterstock

When it comes to taking advantage of tax breaks included in President Joe Biden’s $1.9 trillion economic stimulus bill, location really is everything. One-quarter of the states are not offering a tax break on unemployment benefits received in 2020 — even though that was a key part of the stimulus package passed earlier this month.

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CNBC, citing data from H&R Block, reported on Tuesday that 13 states will not let taxpayers waive 2020 unemployment compensation from this year’s state tax returns. That’s despite the fact that President Biden’s American Rescue Plan, designed to provide financial relief to those impacted by the COVID-19 pandemic, includes a provision that lets taxpayers waive federal taxes on up to $10,200 of 2020 unemployment benefits per person.

The 13 states that will make taxpayers pay state taxes on the full amount of their unemployment compensation are Colorado, Georgia, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, North Carolina, New York, Rhode Island, South Carolina and West Virginia, CNBC reported.

See: The COVID-19 Unemployment Story in Your State
Find: Reasons Your Unemployment Claim Was Rejected — And How To Fix It

The remaining states either don’t levy personal income taxes or they have have state laws excluding unemployment income from state taxes, they offer partial tax breaks on unemployment benefits or they’ve adopted the new federal rules. Two states — Ohio and Vermont — haven’t formally enacted the exclusion, but tax preparers have advised taxpayers to file as if the break had been enacted, apparently expecting that it will be, according to Fortune.

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A lot of taxpayers would otherwise qualify for the tax break. Last year about 40 million Americans received unemployment insurance benefits, according to Fortune, citing data from the Century Foundation. Although most of those people eventually found new jobs, more than 18 million were still unemployed and claiming benefits at the end of the year.

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Last updated: March 31, 2021

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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