Thirteen States Aren’t Offering a Tax Break on Unemployment Benefits Received Last Year

  • Thirteen states aren’t offering a tax break on unemployment benefits received last year, according to data from H&R Block.
  • The American Rescue Plan, a $1.9 trillion Covid relief bill, waived federal tax on up to $10,200 of jobless benefits per person.
  • The remaining states partially or fully exclude benefits from tax. More than a dozen are adhering to the new federal rule. Others don’t levy an income tax, for example.
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ore than a dozen states aren’t offering a new tax break on unemployment benefits.

That means taxpayers will need to pay state tax on benefits they received last year, absent any forthcoming changes to state law.

The American Rescue Plan waived federal tax on up to $10,200 of jobless aid per person collected in 2020. The $1.9 trillion Covid relief measure limits that break to individuals and couples whose income was less than $150,000.

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State tax

But not all states followed suit.

As of Monday, 13 aren’t excluding unemployment compensation from taxes, according to data from tax preparer H&R Block.

They are: Colorado, Georgia, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, North Carolina, New York, Rhode Island, South Carolina and West Virginia.


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