Massachusetts UI and PPP Tax Relief a Signature Away

Date: March 31, 2021

The Massachusetts House and Senate have now both unanimously voted to support legislation freezing unemployment insurance rates at schedule E and preventing PPP loans from being taxed by the state. The bill now awaits Governor Charlie Baker’s signature.


House Bill No. 90 bill will:

  • Freeze unemployment insurance taxes at schedule E for two years (2021 and 2022) preventing a 60% increase in UI taxes. It also authorizes the state to issue bonds to repay federal advances in UI funding so the state can take advantage of lower rates.
  • Prevent forgiven PPP loans from being taxed by the state of Massachusetts. Presently, businesses that file as pass-through entities for tax purposes would face state taxes on their forgiven loan amounts.
  • Mandate paid emergency leave for all workers. This bill ensures all workers in Massachusetts have access to upwards of 40 hours of paid emergency leave for COVID-related reasons. Employers with fewer than 500 workers would be eligible for federal tax credits to cover the cost of the paid leave. Businesses with more than 500 workers will have access to a state fund for reimbursement.

NFIB will continue to advocate for UI tax relief throughout the legislative session, as a freeze is only a temporary solution. It is strongly recommended that Massachusetts use some of the billions of dollars in federal funds to help replenish the UI Trust fund to ensure its solvency does not fall squarely on employers who were forced to close their doors by the state. We ask that you examine your UI rates closely when they become available, more specifically the “solvency assessment”, to monitor the rate of increase. Stay tuned for more information on UI taxes as this issue is not going away.

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