"Even with this additional employer surcharge, businesses in Massachusetts will save money as a result of our action today," Cutler, a Duxbury Democrat, said on the House floor. Josh Cutler, co-chair of the Labor and Workforce Development Committee, told the News Service the surcharge would result in an average cost of $57 per employee in 2021 and $66 per employee in 2022. Aaron Michlewitz.īusinesses would also face a new surcharge, in the form of an excise tax on employee wages, through December 2022 to help repay interest due in September on the federal loans. "While unemployment has been coming down, certainly compared to where it was back in June of last year, we still definitely have some challenges ahead of us, and bonding that money is going to give us some flexibility of not putting it all on businesses immediately," said House Ways and Means Committee Chair Rep.
Interest rates on municipal bonds are lower than the 2.27% rate that will be due on the federal loans, and supporters say the step will allow Massachusetts to save money in the long run. It would also authorize the state to bond up to $7 billion to keep benefits flowing and pay back the more than $2.2 billion the state has borrowed from the federal government for unemployment so far. The legislation would freeze the rate schedule in 20, settling the average per-employee cost at $635 in 2021 and $665 in 2022, according to the Associated Industries of Massachusetts. That dire outlook is set to trigger a shift in the tax rate schedule that, without action, would push the average per-employee cost on businesses from $544 in 2020 to $866 in 2021, a nearly 60 percent jump. In its most recent monthly report, the state Department of Unemployment Assistance projected the trust fund will post year-end deficits of $4.7 billion in 2021, nearly $5 billion in 2022, $4 billion in 2023, and $2.9 billion in 2024. The demand wiped out the unemployment insurance trust fund, which cratered from a balance of $1.6 billion in February 2020 to $2.2 billion in the red by year's end. The state's unemployment system is funded by contributions from businesses, which can scale up depending on how often an employer's workers seek the aid.ĬOVID-19 and the widespread changes to public life it wrought created a tidal wave of joblessness, spiking at a 17.7% statewide unemployment rate last June. Senate leaders expect to take the bill up next week and have already indicated their support. Susannah Whipps of Athol - voted present. Jay Barrows of Mansfield, Angelo D'Emilia of Bridgewater, and Donald Wong of Saugus as well as independent Rep.
The House voted 155-0 in favor of the bill. All of this goes into the hiring back of employees." It allows them to hire more people with the freeze in the rate, the forgiveness of the PPP stuff allows them to retain capital. "The more money we can keep in and under the control of the small business owners, the better off we're all going to be. "We're trying to help small businesses get back on their feet," Mariano said. House Speaker Ron Mariano told reporters after the bill's passage that "the thrust of the bill is always about getting people back to work."
#MA UNEMPLOYMENT TAX BREAK PLUS#
It would also authorize $7 billion of borrowing to keep the depleted unemployment fund solvent and pay back federal loans, plus impose a separate surcharge on businesses to cover federal interest. The bill would freeze a rate schedule, thereby imposing smaller increases in unemployment taxes businesses pay in 20. Charlie Baker proposal aimed at stabilizing the state's unemployment system and also includes provisions such as creation of a paid sick leave program for employees who are affected by COVID-19 and tax breaks on any forgiven Paycheck Protection Program loans from 2020. The Massachusetts House unanimously approved a wide-ranging tax relief, paid emergency sick leave and unemployment system funding bill Thursday that would soften jobless aid insurance premium hikes set to hit businesses in the coming weeks.īoth laid-off workers and employers stand to gain access to tax breaks under the bill, which is built on a Gov. (Jesse Costa/WBUR) This article is more than 2 years old.
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