RI lawmakers urge McKee to introduce a $ 10,000 unemployment tax exemption

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PROVIDENCE, RI (WPRI) – The US bailout plan, which went into effect earlier this year, included a tax exemption of $ 10,200 on unemployment benefits.

Now Rhode Island lawmakers are pushing for laws that reflect this state-level exemption.

Unlike the federal government, RI will fully tax unemployment benefits

Since the RI Tax Department went into full taxation of unemployment benefits, 12 Responds has received dozens of questions from viewers wondering whether the state would eventually introduce an exemption.

For this reason, the Chairman of the Senate Minority, Dennis Algiere, has drafted a bill to change the state tax law.

“I think we should continue the path we have chosen, that is, follow the leadership of the government,” said Algiers.

Algiers said he had received numerous calls from his constituents as well as local tax advisors and accountants.

“They already filed their tax returns and they didn’t know this was going to be taxable income,” he said. “They just assumed they were following the IRS rules.”

In a letter to Governor Dan McKee, Algiers and his co-sponsors expressed frustration with the state’s decision not to introduce an unemployment tax exemption.

“On behalf of our constituents, who were so badly affected last year, we respectfully ask you to ask your department to reconsider this decision and to follow the federal exemption,” the letter said.

“The amount of revenue our state will receive from ignoring federal guidelines and taxing 100% unemployment benefits is negligible, but the impact on more than 100,000 struggling taxpayers is significant,” it said.

McKee previously spoke out against the exemption, claiming it would cost the state too much money. A McKee spokesman told 12 News he looks forward to reviewing any laws or proposals that could help ease the burden on Rhode Islanders during this pandemic.

Hearings on Algiers legislation and the accompanying law in the RI House are expected to take place next week.

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