People who received unemployment compensation benefits since the coronavirus pandemic began could owe as much $78 billion in federal and state income taxes on those payments, according to an independent tax-policy nonprofit.
People who received unemployment compensation benefits since the coronavirus pandemic began could owe as much $78 billion in federal and state income taxes on those payments, according to an independent tax-policy nonprofit. As of Feb.13, states spent about $153 billion in regular unemployment compensation payments, nearly all of it since the pandemic began last year, while the federal government spent $441 billion to supplement those payments and expand and extend eligibility, said Jared Walczak, vice president of state projects for the Tax Foundation. That could generate $65 billion in federal income revenue and nearly $13 billion in state income taxes, Walczak said. In Massachusetts, he said, estimated revenue from income taxation of unemployment benefits could amount to $789.74 million on the federal share and $330.
