Rep. Mary Lightbody (D-Westerville), 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. The bill includes many long-held Democratic priorities to expand tax cuts for lower and working class families and to expand credits for child care, as well as provisions from the American Rescue Plan Act of 2021 among other changes.
“SB 18 will provide much needed financial relief to millions of Ohioans,” said Rep. Lightbody. “The pandemic hit many households hard, and this bill will help ease some of their financial burdens. The bill is in keeping with our Ohio Promise that you can live, work, and retire here in safety and security. This bill allows us to keep that promise, and I commend my colleagues who worked hard in the Ways and Means Committee to bring a bi-partisan bill forward to the House floor today, and was pleased to support the bill.”
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.