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Rep. Russo applauds passage of bill paving way for American Rescue Plan to benefit Ohio's working people and families

Key tax provisions of Democratic stimulus to save Ohioans hit hardest by recession millions of dollars
March 24, 2021
C. Allison Russo News

Rep. Allison Russo (D-Upper Arlington), today applauded the House passage of Senate Bill (SB) 18, legislation to implement key provisions of the American Rescue Plan to benefit working people and middle class families, including excluding the first $10,200 in unemployment benefits from income tax for more than 2 million Ohioans who lost jobs during the pandemic as well as implementing long-held Democratic priorities to expand tax cuts for lower and working class families and expand credits for child care, among other changes.

“This pandemic has taken a toll on us all,” said Rep. Russo.  “By aligning Ohio law with key provisions of the Biden Administration’s American Rescue Plan, we can provide relief and put money back into the pockets of hardworking Ohioans when they need it most, while shoring up our business sector and ensuring it remains strong as we move towards a post-pandemic recovery.”

SB 18 incorporates several key components of the American Rescue Plan into Ohio law, including temporary measures to benefit working people and families by:

·         Excluding the first $10,200 received in unemployment benefits from gross income, which could benefit nearly 2 million Ohioans who lost their jobs through no fault of their own during the pandemic;

·         Expanding the amount and eligibility for the Earned Income Tax Credit to benefit lower income Ohioans and their families;

·         Increasing the amount of the child and dependent care credit to put more money back in the pockets of working parents and families;

·         Excluding forgiven student loans from gross income to benefit young professionals.

The bill also benefits Ohio’s small businesses by excluding restaurant and other disaster loan funding from gross income and exempting forgiven Paycheck Protection Program loan amounts from the state's commercial activity tax, which will save many of Ohio’s small businesses millions of dollars.

Democrats also highlighted a number of wins they were able to deliver during the committee process, including a provision to prompt the tax commissioner to waive penalties and interest on underpaid income taxes on unemployment benefits received in 2020. Many taxpayers who had to utilize unemployment compensation due to the unique challenges of 2020 may not be aware that they owe taxes on those benefits.

Democrats offered an amendment on the House floor to waive all income taxes on unemployment insurance benefits to support Ohioans who lost their jobs during the pandemic, which was rejected by House Republicans.

The bill moves to the Ohio Senate for concurrence on House changes.