UNEMPLOYED TAXED AT HIGHER RATE
By Dolores Kong
04/07/2001
The Boston Globe

Due to a bureaucratic snafu, people who think they're
doing the right thing by having taxes deducted from
their weekly unemployment checks actually have more
state taxes withheld than working people do.
Anyone on unemployment who asks for state taxes to be
witheld will have 5.95 percent taken out. People with
jobs have 5.6 percent deducted.

That 0.35 percent more amounts to a mere $1.66 a week
- based on the maximum unemployment check of $477. But
that's nearly $50 over the maximum benefit period of
30 weeks.
"We're obviously aware of this and trying to change
it," said Susan McKelliget, chief of staff for the
Division of Employment and Training. She pointed out
that only about 10 percent of claimants have taxes
withheld, and that any overpayment would be refunded.
In 1999, the division filed an unsuccessful bill to
fix the problem. The refiled bill is to be heard in
committee on Wednesday.
The state tax rate dropped from 5.95 percent in 1999
to 5.85 percent in 2000 to 5.6 percent today. It will
drop to 5 percent in 2003. Even so, DET by law must
withhold 5.95 percent.