Harkins, Merski: House unanimously passes bill to prevent state, local taxation of stimulus payments

HARRISBURG, May 4 – Pennsylvanians would not have to surrender any portion of their federal stimulus checks to state or local taxes under a bill the House passed unanimously today, announced state Reps. Bob Merski and Pat Harkins, both D-Erie.

Merski and Harkins said they voted for H.B. 2408 – which would exempt cash payments to individuals and couples under the CARES Act from state and local taxation – to ensure residents receive the maximum benefit from the emergency federal funding.

“The pandemic dealt a huge blow to working families that no one could have expected or prepared for,” Merski said. “It was a tidal wave, and it wiped out household budgets that were already stretched to the limit. Now, Erie families need every single dollar to help them get back on their feet. I’m glad we’re one step to closer to ensuring that happens.”

Harkins agreed, saying: “The CARES Act was meant to help residents hurt by the pandemic, not to supplement the state treasury. The dollars it authorizes are intended to keep food on the table and make sure families can purchase prescriptions and pay rent. Taxing any part of that is taking away money Erie residents need to survive. I’m encouraged that this bill passed unanimously today.”

CARES Act stimulus payments to individuals and couples are not subject to federal taxation.

The bill would also allow charities and nonprofits to restructure their investment income to help them financially during the pandemic and would exempt from taxation loan forgiveness for federal Paycheck Protection Program loans to businesses.

The bill heads to the state Senate for consideration.