Axne’s Efforts On COVID Bill Will Save Many Iowans Money On Taxes

Photo by Julie Fleming

Included in the COVID-19 relief bill passed by the U.S. Senate on Saturday was a provision first proposed by Rep. Cindy Axne and Illinois Sen. Dick Durbin.

The measure would waive the first $10,200 of unemployment benefits earned in 2020 from taxes for households earning less than $150,000 this season. It seemed last month unlikely to pass, but was included in the Senate’s bill after supplemental unemployment benefits were reduced to $300 a week from $400 a week, freeing up money in the budget for its estimated $30 billion cost.

“This is fantastic news for the millions of Americans and thousands of Iowans who faced a surprise tax bill on the unemployment benefits they utilized last year to keep a roof over their heads and food on their table,” said Axne in a statement. “This commonsense fix that Senator Durbin and I introduced last month will protect families, promote economic stability, and ensure that the additional benefits that we provided through the CARES Act last year stay in the pockets of those in need instead of on their tax bills.”

House Democrats expect to pass the $1.9 trillion coronavirus relief bill on Wednesday morning and President Joe Biden is expected to sign it into law over the weekend.

The Huffington Post reported that when the provision was proposed months ago by Axne and Durbin, it didn’t make it into the House’s version of the COVID-19 relief bill and was unlikely to make it in the Senate’s final version.

“I really didn’t think this was going to happen,” said Elizabeth Pancotti, policy director at Employ America, told the Huffington Post. “This was a shock to everybody.”

The tax relief included in this provision would cover 17 weeks of the additional $600 the CARES act provided per week for unemployed Americans through the end of July.

This amounts to as much as $1,020 in tax forgiveness for unemployment claimants, assuming a 10 percent tax rate, according to a press release.

 

by Isabella Murray
Posted 3/10/21

Iowa Starting Line is an independently owned progressive news outlet devoted to providing unique, insightful coverage on Iowa news and politics. We need reader support to continue operating — please donate here. Follow us on Twitter and Facebook for more coverage.

Leave a Reply

Your email address will not be published.

*

*

*