LITTLE ROCK –The Senate has voted to exempt last year’s unemployment benefits from state income taxes, to help people who lost their jobs because of the economic impact of the Covid-19 pandemic.

Senate Bill 236 would apply to benefits paid in 2020 and 2021. The unemployment rate in Arkansas had been around four percent until the coronavirus pandemic caused widespread business closures, especially in hospitality, tourism and travel. The jobless rate spiked to around 10 percent before it began to improve.

Before the pandemic, about 44,000 people in Arkansas claimed unemployment in 2018 and 2019, a state revenue official told senators during a committee hearing on SB 236. Last year more than 281,000 people filed for unemployment, according to the Department of Workforce Services.



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