Del. Exempts Jobless Benefits From 2020 State Income Tax

Delaware will exempt unemployment benefits from 2020 state income tax under a bill signed by the governor as relief for workers and businesses affected by the economic downturn caused by the COVID-19 pandemic.

H.B. 65, signed Monday by Democratic Gov. John Carney, exempts unemployment compensation benefits received in 2020 and extends the 2020 unemployment insurance assessment rates into 2021 to avoid a rate increase on employers due to the rise in unemployment claims as a result of the pandemic.

The bill also waives the 13-week waiting period before the state can start paying extended unemployment benefits for the period beginning Nov. 1, 2020, through Dec. 31, 2021, according to a fiscal note. The measure will reduce state revenues by $18.8 million for the 2021 fiscal year and $6 million for 2022.

Carney put forward the exemption for unemployment insurance as one of the central tax proposals in his $4.7 billion budget presented in January.

--Editing by Vincent Sherry. 

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