New York State fails to care about the unemployed!

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New York State fails to care about the unemployed! 

Left out of the progressive $212 billion budget, was Albany’s punitive tax on the unemployed. 

Governor Cuomo and the Legislature under Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie told the 3.9 million New Yorkers who lost their jobs and collected unemployment benefits during the COVID year of 2020 to pay up $1.4 billion, with an average tax bill of $365.  

In a normal year, unemployment is fully taxable as unearned income, both by the IRS and New York. But understanding that COVID pushed many people off payrolls and that Congress sharply increased benefits, taxing that aid money is just foolish. 

So, President Biden’s $1.9 trillion COVID bill was correctly amended when it passed last month, exempting, for 2020, the first $10,200 of unemployment for people making under $150,000. New York tax law would usually automatically follow, under a policy called rolling conformity, but the state severed, or decoupled, a year ago. 

That meant that Albany had to write its own exemption, but complicating things was Congress inserting language into the bailout bill prohibiting states from cutting taxes. The Treasury Department was expected to give guidance on what would happen; New York officials kept asking Washington for guidance but to no avail. 

It was only on Wednesday that the federal government gave states the okay to change their own tax codes to match IRS rules and not suffer any penalty. That was a month after Biden signed the COVID relief bill. The uncertainty was one of the problems that stopped Albany from acting. Now that the coast is clear, NYS needs follow the feds and do so before the May 17 Tax Day Deadline.