Massachusetts workers could get extension for their state taxes this year.
The Massachusetts Senate advanced a proposal to delay the state tax filing deadline from April 15 to May 17, folding it into the $351 million COVID-19 relief bill for businesses and workers. The Senate passed the bill, H. 90, unanimously Thursday afternoon.
“We needed to get this done,” Senate President Karen Spilka told reporters after the vote. “People are filing their taxes already. Businesses are filing their taxes.”
Shortly before the Senate session began, Spilka and House Speaker Ron Mariano announced they had agreed to propose an extension to the state tax filing deadline following the Internal Revenue Service’s decision Wednesday night to extend the federal filing deadline.
“This tax flexibility, which was also authorized last year by the Legislature, will provide stability and ensure residents have time to prepare and file as we continue to weather the impacts of the pandemic,” Spilka and Mariano said in a joint statement.
The Senate and House must reconcile the differences between the Senate bill and the version the House passed last week before the bill gets put to a final vote.
The bill, H. 90, makes several changes to the unemployment rate schedule, the state tax code and the paid leave policies during the pandemic — an issue Spilka highlighted as a Senate priority in her inaugural speech.
“They deserve this,” the Ashland Democrat said, referring to paid leave policies for workers. “They’ve been putting themselves on the front lines.”
Employers would have to let workers use paid sick leave if they are exposed to or test positive for COVID-19, as well as if they are getting vaccinated or feeling unwell after a COVID-19 shot. Employees could also qualify for paid leave if they need to take care of a family member who has COVID-19.
The proposal would also freeze the unemployment rate for 2021 and 2022, authorizing state borrowing to bring the state’s unemployment trust fund out of the red, and would offer a credit for taxpayers who received unemployment and make 200% below the federal poverty line.
Senate Minority Leader Bruce Tarr, a Gloucester Republican, called the passage of the unemployment bill “a critically important step” for the state’s workforce.
“It will ease tax burdens on businesses that need resources to rebuild and revitalize and help employees with the financial stability that can be elusive in these challenging times,” Tarr said.
Tarr and several state legislators, Republicans and Democrats, pushed for changes to the state tax code that would enable the state to exempt forgiven Paycheck Protection Program loans from gross taxable income.
The $900 billion stimulus bill Congress passed in December changed the federal tax codes so businesses with forgiven PPP loans could exclude those funds from their gross income. Those businesses were already able to claim deductions on the expenses they paid using PPP money, meaning the stimulus bill effectively gave recipients with forgiven loans a “double benefit,” as some tax experts describe it.
Massachusetts conforms to the federal corporate tax code but not the individual tax code, meaning corporations in Massachusetts could claim the so-called double benefit in their state taxes but small businesses that file individual taxes could not.
“As we slowly emerge from the COVID-19 pandemic, I am proud of the collective action taken by the Senate and House to pass this comprehensive bill that strikes a balance to help businesses, workers and jumpstart an equitable recovery for our Commonwealth,” said Senate Ways and Means Committee Chairman Michael Rodrigues, a Westport Democrat, in a statement Thursday night. “With more people getting vaccinated by the day, and our economy re-opening, this bill will bring much-needed relief to small businesses, keep our essential front line workers safe and target tax relief to lift up low-income families who lost jobs during this pandemic.”
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- Here’s how much your town or city will get from the $8.1B federal stimulus funds for Mass.