Bill would exempt some unemployment benefits from 2020 income tax in West Virginia
(The Center Square) – Legislation being introduced into the West Virginia General Assembly would partially exempt unemployment benefits from the state’s 2020 income tax, Gov. Jim Justice announced.
The legislation, which the governor is submitting to the legislature, would exempt the first $10,200 a person received in the 2020 tax filing year from state income taxes. The bill would apply to nearly $1.36 billion worth of unemployment benefits.
“Some other states are requiring their people to pay taxes on the unemployment they received as a result of the pandemic,” Justice said in a statement. “We’re not going to do that in West Virginia. We need to stand rock solid with all of our fellow West Virginians who had to endure some really tough times over the past year.”
More than 197,000 residents received unemployment benefits in 2020. This was an increase from previous years because of the COVID-19 pandemic and subsequent economic restrictions, which forced businesses to temporarily shut down or reduce services. It mirrors changes in the federal tax code in the American Rescue Plan Act of 2021 signed by President Joe Biden.
“It is a huge tax break for people that are really struggling, through no fault of their own,” Justice said. “We absolutely can and should do this.”
The governor has also proposed legislation to cut the state’s income tax by 60%. The proposal would also increase the sales tax and other taxes. It includes more than $1 billion in tax cuts and more than $50 million in rebate, but also includes $900 million in tax increases. In effect, it would lead to a reduction of $150 million in tax burdens for residents.
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