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Reps seek $10,200 tax exclusion for essential workers

June 27, 2021
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Photo by 竟傲 汤 from Pexels

Texas is pretty much open. Even my local grocery store, which for almost a year had required masks of shoppers and employees alike, now says the health safety protocol is optional.

I'm vaccinated but still wear mine. I will as long as any of the store's employees are masked. I'm covering my nose and mouth for them, since they've had to be exposed to the COVID-19 pandemic from the get-go.

When the young man at the register and the older woman in deli and all the store employees stocking shelves and produce sections and bagging groceries and bringing carts in from the parking lot feel safe, I'll join them in showing my full face again.

That appreciation for the jobs they and other essential workers have done over the last year and a half is why I hope they will get the benefits of a tax bill introduced by Reps. Jack Bergman and Ashley Hinson.

Tax-free income for certain workers: The two Republicans, Bergman from Michigan and Hinson from Iowa, say their Essential Worker Tax Parity Act is, as the name indicates, only fair.

H.R. 2563 would exclude from gross income $10,200 in wages or net earnings of certain taxpayers for taxable year 2020.

Why $10,200? That the amount of unemployment benefits deemed nontaxable for the 2020 tax year as part of the American Rescue Plan Act that became law in March.

Bergman and Hinson say a similar tax break should be extended those who worked as COVID-19 raged.

"Our essential workers have put themselves in harm's way as they continue to provide services throughout the pandemic," said Bergman in announcing the bill's introduction. "Local grocery store clerks, farmers, restaurant staff, nurses, emergency service personnel, truck drivers, and all workers who carried the economy on their backs deserve this tax break now more than ever."

No action yet: In a few cases, some of these workers got bonuses or short-term pay raises for coming in to work when the coronavirus was rapidly spreading.

But it would be really nice if they got to keep that by having most or all of it declared tax-exempt income.

That's why the $10,200 that Berman and Hinson want to be tax-free for 2020 tax filing purposes earns this weekend's By the Numbers honor.

Will it happen?

The Essential Worker Tax Parity Act has been sitting in the House Ways and Means Committee since it was dropped in the hopped back on April 15. But the sponsoring pair could push for it to be added as an amendment to other legislation the House takes up this year.

You also might find these items of interest:

 

Coronavirus Caveat & More Information
In 2021, we all still are dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.

But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.

 

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It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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