Del. Unemployment Benefits In 2020 Not Subject To State Income Tax


Governor John Carney Monday signed legislation that will save Delawareans who were left unemployed in 2020 from having their unemployment benefits subject to state income tax.

The General Assembly quickly passed the measure, House Bill 65, in the early days of the session.

“Thousands of hard-working Delawareans have lost their jobs during the past year through no fault of their own, putting them in a difficult position at one of the worst times possible. We owe it to those impacted by the pandemic to take whatever action we can to ease their burden,” Representative Ed Osienski, D- Brookside, said. “Exempting the unemployment benefits that have been a lifeline to so many families will mean that they aren’t blindsided when they file their state taxes this year, keeping a little more money in their pockets. We’re also taking steps to protect businesses so they aren’t penalized with higher taxes during the pandemic, which hopefully will help them keep their doors open.”

Osienski was the lead sponsor of the bill in the House.

“Taxes are quickly coming due for thousands of Delawareans who have made less, had fewer opportunities, and been put out of work by the pandemic,” Senator Jack Walsh, D-Stanton, said. “In a tax year defined by unemployment and shuttered businesses, it’s on all of us in state government to extend relief that is straightforward, effective, and gets where it needs to go on time. This bill does that, both for our small businesses and for the tens of thousands of workers who filed for unemployment last year. I am proud to have worked on this legislation and I thank the Governor for signing it in time to do the most good.”

According to Division of Unemployment Director Darryl Scott, about $1-billion in unemployment benefits were paid out in 2020.