New York state to tax all unemployment benefits


ALBANY — New York state residents who received unemployment payments in 2020 wil have to pay state income taxes on all of the jobless benefits they received after state lawmakers decided against adopting a federal exemption approved by U.S. lawmakers and signed into law in March.

While the federal government, as part of the American Rescue Plan, exempts the first $10,200 in unemployment benefits for most residents ($20,400 for married couples filing jointly) received in 2020 from federal income taxes, the state will not, according to officials.

The federal break is available to single and married filers if they earned less than $150,000 in income.

New York budget director Robert Mujica said Wednesday that all unemployment payments will remain subject to state taxes— as it has been “for decades.”

Approximately $59 billion in unemployment benefits was paid to nearly 4 million state residents between the start of the pandemic in March 2020 through the end of the year.

Eligible New York taxpayers can still exclude the first $10,200 in unemployment payments they received in 2020 from their federal taxes — just not their state taxes. The deadline to file both state and federal income taxes is Monday, May 17.


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