UI and PPP Tax Relief Becoming a Reality

Date: March 17, 2021

The Massachusetts House voted 155-0 to advance legislation that would freeze unemployment insurance rates and prevent PPP loans from being taxed by the state. House Bill No. 89 now moves to the Senate and is expected to be voted on Thursday, March 18th.

House Bill No. 89 bill will do the following:

  • Freezes 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. This means a far smaller increase in UI taxes than the 60% increase that was projected to occur if no action was taken.
  • Prevents 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.
  • Mandates 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.

This bill passed the House unanimously (155-0) and is expected to go before the Massachusetts Senate for a vote on March 18th. NFIB first raised both the PPP loan and UI tax issue to lawmakers last Fall and worked with lawmakers to move these bills quickly. On Monday, testimony was provided in a Senate Ways and Means hearing reaffirming our support for the tax relief and raising concerns over the emergency leave, while also stressing the need for additional unemployment insurance tax reform.     

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