Tax Relief

Delaware residents might get unemployment profit tax breaks once more this 12 months

State lawmakers want to give Delawareans more tax breaks this year.

Delaware residents typically have to pay state taxes on any unemployment benefits they receive.

But last year lawmakers waived these taxes to put a little more money in local residents’ pockets.

State Rep. Ed Osienski says it’s possible to take another hiatus this year thanks to federal funds that help keep the state’s trust fund for unemployment filled.

“Our fund is currently in good shape,” he says. “Unlike many states, we didn’t have to go out and borrow federal dollars to replenish our fund. So our fund is in good shape and we are able to do so. “

The savings per person depend on how much unemployment benefits someone received in the last year. The benefits are taxed as part of the income, so Delewareans could save between 2 and 7 percent of those benefits.

Last year the state provided around $ 25 million in tax breaks, and Osienski says the relief needs to be expanded due to the number of people continuing to struggle through the pandemic.

The bill also takes the pressure off employers and ensures that they will have to pay less into the state’s unemployment fund this year.

Although it is a temporary measure, Osienski would like a permanent reform of the unemployment insurance system in the First State.

“The advantage of Delaware is rather small compared to the surrounding states,” says Osienski.

The maximum weekly benefit in Delaware is $ 400, which is lower than the surrounding states. The state already increased the benefit amount in 2019.

Osienski says he works in the construction industry, where workers are constantly being laid off, and regularly sees workers in New Jersey pick jobs across Delaware that are worth up to $ 713.

Osienski says the Unemployment Insurance Advisory Board will meet next year to discuss possible changes, including increasing benefits, finally abolishing the state tax, and changing how different employers bill for unemployment insurance.

Roman Battaglia is a corps member of Report for America, a national utility that places journalists in local newsrooms.

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