Rep. Emma Mulvaney-Stanak introduced an amendment to H.738, a miscellaneous tax bill on March 23, 2022. The amendment was ruled not germane to the underlying bill for which Rep. Mulvaney-Stanak attempted to appeal to allow the body to debate the merits of the policy idea. However, she was overruled. Read the text of her amendment below and/or watch the footage of the amendment report.
Remarks by Rep. Emma Mulvaney-Stanak on March 23, 2022 on the House of Representatives floor.
You may find this amendment on page 1907 of today’s calendar.
This amendment proposes to replicate the tax policy the legislature approved within H.315 (Act 9) in 2021. This amendment will exempt the first $10,200 of income from unemployment compensation received in 2021 by individuals with adjusted gross income of less than $150K. This amendment also replicates language from Act 9 (2021) to define household income pursuant to 32 VSA § 6061(4)(A) and (5) to include all unemployment compensation (taxable and non-taxable) received by the taxpayer in 2021.
In 2021, the federal government extended pandemic unemployment assistance programs until September 2021 and late in the same year, exempted the first $10,200 received from unemployment compensation from 2020 federal income tax. Vermont followed suit in H.315 (Act 9) to link our 2020 state income tax policy with this federal income tax exemption. These policies were in response to the needs of many working people who experienced prolonged unemployment due to pandemic-related economic shutdowns in 2020 and into 2021.
The Vermont legislature took an additional step in 2021 with the passage of S.62 (Act 51). S.62 provided $400M in unemployment insurance tax relief to employers and increased unemployment compensation for claimants by $25 a week once the federal pandemic unemployment assistance programs ended last fall. These set of policies recognized the need to support employers and workers on the long journey of economic recovery from this pandemic.
Unfortunately, the $25/week unemployment compensation increase approved in S.62 was not implemented in 2021 due to a USDOL ruling. As a reminder, a Vermonter receives on average about $330/week on state unemployment. While I hope this body finds a remedy to solve the stalled $25/week compensation issue before the biennium is over, we have not yet made this fix. As a result, unemployed workers have seen nothing from our work in S.62.
This amendment is an opportunity to strategically target investment in Vermonters who still need our support. Pandemic economic recovery is slow for many working people. Many people saw a significant drop in income when federal pandemic unemployment assistance programs ended in September 2021 and again when the advance payments of the 2021 child care tax credits ended in December 2021.
Tax season is a challenging time for many Vermonters who struggle to come up with the money necessary to pay state and federal taxes while also making ends meet. We have an opportunity to offer relief to some of taxpayers who spent a portion of 2021 navigating unemployment while trying to return to the workforce.
Vermont would join 4 other states who recently exempted unemployment compensation from state income tax for the 2021 tax year. These states include: Delaware, Arkansas, Maryland, and Massachusetts. Minnesota is also considering a bill. These states join 6 other states who already exempt unemployment compensation from state income tax prior to the pandemic. A member of this body called the unemployment state income tax exemption we adopted in 2021 a “must pass” piece of policy. I ask this body what has significantly changed for working people in 2021 that would make the investment contained in this amendment unnecessary? We have an opportunity in this amendment to make a small, but strategic investment to support working people’s economic well being. I ask for your support.
Thank you.
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