Bill advances to protect relief checks from taxes
By TAYLOR BROWN
tbrown@yourmvi.com
Legislation that would exempt federal coronavirus funds from state and local taxation cleared the Senate Finance Committee Monday.
Sen. Jim Brewster, D-McKeesport, and state Rep. Brandon Markosek, D-Allegheny, introduced companion measures in the Senate and House.
“House Bill 2408 has major potential to do a lot of good for state residents, which is major reason I believe my colleagues passed it through the state House unanimously,” Markosek said.
Brewster, who introduced it as Senate Bill 1104, said taxing stimulus money would defeat the purpose of the measure. Stimulus checks are already exempt from federal taxes.
“The last thing that men and women who received federal stimulus payments should face in this very difficult time is an added tax liability,” Brewster said. “The legislation would exempt federal CARES Act payments from state and local taxes.”
Markosek said the pandemic has already been difficult enough for residents.
“COVID-19 has been harsh for all residents in one form or another. Unfortunately, many struggled financially due to a sudden loss of income, which is why the CARES Act was passed,” he said. “This funding was exempt from federal taxation with hopes that it would maximize the impact of the distributed funding. This bill does the same exact thing at the state level.”
Under the $2.2 trillion federal stimulus bill, people earning up to $75,000 a year received $1,200 checks, plus $500 per child.
Married couples earning up to $150,000 per year received $2,400 plus $500 per child.
Brewster said the bill would ensure residents have the resources to get by as the economy recovers.
“As I indicated when I originally introduced the Senate version of the tax exemption, we need to ensure that men and women have financial resources available to bridge fiscal gaps as we promote a swift economic recovery from the COVID-19 pandemic,” he said. “We do not need to provide federal financial help now, then ask for some of it back in the form of taxes later.
“Stimulus funds should not be subject to state or local taxation, period.”
The measure must still clear the Senate Appropriations Committee and be voted on by the full Senate.
