The House recently passed a bill that would exempt Pennsylvanians from paying state tax on their federal stimulus payments and business loans.
The federal CARES Act provided Americans making less than $99,000 and couples making less than $198,000 with funds. The funding is a response to the COVID-19 pandemic and is not subject to federal taxes. The act leaves it up to each state to decide whether the funds are subject to state taxes.
House Bill 2408 exempts residents from paying state tax and also allows charities and nonprofits to restructure their investment incomes and makes loans to businesses through the federal Paycheck Protection Program exempt from state taxes.
“When the federal government passed the CARES act, they left it up to the states as to whether those payments would be taxed or not,” Rep. Adam Ravenstahl (D-Pittsburgh), who cosponsored the bill, said. “To me, that isn’t even a question. At a time when so many families and businesses are hurting, and every dollar counts, this is an automatic decision to make sure they can keep their full benefits.”
The bill would help charities and nonprofits stay afloat during the pandemic, Ravenstahl said, so they can continue to assist local communities and families in need.