Legal Aid Society


LAS Slams New York State Income Tax on Unemployment Benefits

Attorneys at The Legal Aid Society and public policy advocates across the state are calling for New York to waive its income tax on unemployment benefits and follow suit after the Biden administration’s American Rescue Plan did the same, waving taxes on up to $10,200 in benefits for those making less than $150,000 a year.

The effort is thwarted by the fact that New York decoupled state tax laws from the federal laws in 2017 after the Trump tax plan was enacted, leaving the Cuomo administration and state legislatures with a narrow window of time to make changes before the end of the 2021 tax season in April, as reported by the Rockland/Westchester Journal News.

“To the extent that New York State can enact legislation reducing its own taxes on unemployment benefits will greatly aid those struggling through the pandemic,” said Young Woo Lee, director of The Legal Aid Society’s Employment Law Unit. “It would greatly aid these workers to keep the hundreds, or even a few thousand, dollars in unemployment benefits.”