House committee approves tax credit to partly offset COVID-era unemployment tax increases

House Committee on Revenue Chair Nathanson on Monday moved House Bill 2,271 as amended out of committee after adopting a dash 2 amendment that reduces the eligibility threshold and narrows the credit.

The bill creates a nonrefundable tax credit against employers’ unemployment insurance payroll taxes for employers whose tax rate in 2025 is lower than in 2024 by a specified margin. The dash 2 amendment lowers the required reduction from 3 percentage points to 2.5 percentage points and limits the 2025 credit to the lesser of the employer’s 2025 taxes or $5,000; under the bill’s original language the credit could extend into the subsequent years with different limits.

Supporters said the credit is aimed at employers who were affected by changes to unemployment insurance rate calculations…