Tax reduction invoice went to Baker’s desk | Regional information

BOSTON – A tax break plan for workers and businesses affected by the pandemic will be sent to Governor Charlie Baker’s desk after lawmakers reached a compromise this week.

The $ 350 million package, which still requires procedural votes, provides for an increase in unemployment insurance rates, waives state taxes on federal paycheck protection program grants, and provides a paid emergency leave program for workers who stand up for COVID-19 issues want to take time off.

“We need to support our companies and workers who are still having problems,” said Rep. Paul Tucker, D-Salem. “This is a really good step forward.”

A key provision allows workers who were unemployed last year or this year to exempt up to $ 10,200 from unemployment benefits received from their state taxes if their household income is below 200% of federal poverty.

The proposal, which was adopted on Monday evening, also eases the burden on businesses by lowering the planned increases in unemployment insurance taxes for the next two years.

A billion dollar deficit in government unemployment insurance, caused by a large number of pandemic unemployment claims last year, is likely to increase the rates paid by employers by an average of 60% from next year onwards.

The plan also provides for a commission to study how to rebuild the Unemployment Fund and authorize the state to borrow up to $ 7 billion from the federal government to help maintain unemployment benefits.

Corporations face a new excise tax on workers’ wages, which lawmakers say averages $ 57 to $ 66 per year to repay the interest on the federal loans. That tax would go under next year.

Additionally, employers who have accepted federal government-issued PPP loans would not have to pay state income taxes on the money.

Most of these paycheck protection loans – about 4 out of 5 – were not granted in the 2020 tax year. Recipients of loans that have been granted have an additional month to apply for an extension of their state taxes as they await a notice of the proposal on the revenue, according to the State Department.

Business leaders say tax break is crucial.

“It’s not a permanent solution, but it’s a good first step to avoid the interest rate shock that many companies would see if nothing was done about the tax hike,” said Chris Carlozzi, state director for the National Federation of Independent Businesses.

Another provision of the bill provides for a $ 75 million COVID-19 emergency sick leave program that gives full-time workers up to 40 hours of paid time off if they become infected and need to quarantine or care for a family member affected by the virus. According to the proposal, part-time employees can also qualify for an exemption.

Legislators also considered moving the deadline for state income tax from April 15 to May 17, but the Treasury Department took unilateral steps last week to make it happen. This follows a decision by the Internal Revenue Service to extend the deadline for filing federal income tax.

Legislature’s Ways and Means Committee is considering Baker’s $ 46 billion preliminary budget, which includes additional relief for businesses and employees.

Massachusetts also expects to receive nearly $ 8 billion in federal funding for testing and vaccines, schools, businesses and local government under a pandemic relief package signed by President Joe Biden two weeks ago .

The State House and Senate will have a final procedural vote on the tax break on Thursday before going to Baker’s desk for consideration.

Christian M. Wade reports on the Massachusetts Statehouse for the North of Boston Media Group’s newspapers and websites.