NY will not comply with feds in exempting unemployment advantages from taxes | Politics
Department of Labor visitors will be turned away at the door by staff due to closings due to coronavirus concerns in New York on Wednesday, March 18, 2020. (AP Photo / John Minchillo)
With the federal government exempting some unemployment benefits from taxes, the question arose whether New York would do the same.
Robert Mujica, the state budget director, confirmed during a press conference Wednesday that New York unemployment benefits are not exempt from state taxes.
“These benefits have been subject to state taxes for decades, so that hasn’t changed,” Mujica told reporters.
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The American bailout plan, which President Joe Biden signed in March, exempts the first $ 10,200 in federal unemployment benefits earned in 2020 from federal income tax. The exemption is available to individuals earning an annual gross income of no more than $ 150,000.
Most states opted for similar state tax exemptions, but New York did not.
Federal exemption is more significant than what the state could offer. Unemployed people do not have to pay at least 1,020 federal taxes, depending on their income tax bracket. If in a higher tax bracket, the savings could exceed $ 2,000.
But the savings at the state level would not be small. For a single applicant who received $ 10,200 in unemployment benefits last year, an exemption from New York would save more than $ 600 in state taxes.