New Yorker’s Unemployment Benefits US Tax Exempt, But Not State

A New York City resident is stuck with an $858 personal income tax bill because while certain unemployment compensation is exempt from federal taxation under a Covid-19 relief law, that money is still subject to state and local tax, an opinion released Thursday said.

The American Rescue Plan Act exempted up to $10,200 of unemployment compensation from federal taxation in 2020 if the person’s total income was below a certain threshold, the New York State Division of Tax Appeals said. But that law’s amendment to the federal Internal Revenue Code doesn’t apply to New York statutes, Administrative Law Judge Barbara ...