February 02, 2021

Warren Joins Durbin, Duckworth, Foster to Introduce Legislation To Provide Relief For Unemployed Americans

The Coronavirus Unemployment Benefits Tax Relief Act Would Remove Taxes On Up To $10,200 In Unemployment Aid For 2020 Tax Filing

Text of Bill (PDF)

Washington, DC – Today, United States Senator Elizabeth Warren (D-Mass.) joined Senate Democratic Whip Dick Durbin (D-Ill.), Senator Tammy Duckworth (D-Ill.), and Congressman Bill Foster (D-Ill.), along with Congresswoman Cindy Axne (D-Iowa), to introduce legislation to provide tax relief for Americans who lost their jobs and utilized unemployment benefits last year – allowing millions of workers to focus their benefits on covering essentials during the coronavirus (COVID-19) pandemic and recession

The Coronavirus Unemployment Benefits Tax Relief Act would waive federal income taxes on the first $10,200 of unemployment benefits received in 2020. The tax relief would extend to both workers who received benefits through federal unemployment programs like Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) as well as those who received traditional benefits through their state unemployment insurance fund.

The CARES Act, passed by Congress in March 2020, provided an additional $600 in unemployment benefits through the end of July. The $10,200 of tax relief provided in this bill would cover 17 weeks of that $600 per week benefit.

This calculation is based on similar tax relief that was provided in the 2009 American Recovery and Reinvestment Act (ARRA). ARRA included up to $2,400 in tax relief to cover unemployment benefits that were provided during the last recession.

The U.S. Department of Labor estimates that more than 18 million Americans are still receiving some form of unemployment benefits. In May, over 25 million Americans were claiming some form of unemployment benefits.

In December, Congress passed new legislation that extended federal unemployment benefits, including an extra $300 per week for all workers, through March 14, 2021.

In the Senate, the Coronavirus Unemployment Benefits Tax Relief Act is also cosponsored by Senators Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.), Mazie Hirono (D-Hawaii), Bob Menendez (D-N.J.), Jack Reed (D-R.I.), and Catherine Cortez Masto (D-Nev.).

The bill is cosponsored in the House by Representatives Ro Khanna (D-Calif.), Andy Levin (D-Mich.), and Scott Peters (D-Calif.).

From the onset of the pandemic, Senator Warren has led efforts in Congress to ensure the economic security of individuals receiving unemployment assistance.

  • In December 2020, Senators Warren and Ron Wyden (D-Ore.), along with 29 of their colleagues, wrote a letter urging Senate leaders to include an extension of the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC) programs in the next COVID-19 relief package for Americans affected by the economic fallout of the COVID-19 crisis.

  • In July 2020, Senator Warren cosponsored Senator Wyden’s Worker First Act, to authorize $10 billion in grant funding for states that make worker-friendly changes to their state unemployment laws.

  • On April 13, 2020, Senator Warren, along with her colleagues, pressed the Department of Labor to successfully implement the PUA program.

  • On April 7, 2020, Senator Warren and a group of Democrats outlined a number of actions the administration should take to help states disburse the new unemployment insurance as quickly as possible.

  • On May 21, 2020, Senators Warren, Mark R. Warner (D-Va.), Sanders, Doug Jones (D-Ala.) and Richard Blumenthal (D-Conn.) introduced the Paycheck Security Act to cover the wages and benefits of employees of affected businesses and non-profits until the economic and public health crisis is resolved.

  • In March 2020, Senator Warren cosponsored the Pandemic Unemployment Assistance Act, which provided the framework for the unemployment provisions of the CARES Act.