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SENATE BILL 6414
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Passed Legislature - 1996 Regular Session
State of Washington 54th Legislature 1996
Regular Session
By
Read first time 01/15/96. Referred to Committee
on Labor, Commerce & Trade.
Providing for federal income tax
withholding from unemployment compensation benefits.
AN ACT Relating to the
voluntary withholding of federal income tax from unemployment insurance benefit
payments; adding a new section to chapter 50.20 RCW; creating new sections; and
providing an effective date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
NEW SECTION. Sec.
1. The legislature finds
that:
(1) The unique federal
and state partnership of the unemployment insurance program places a special
responsibility on states, and selected Congressional legislation requires
conforming legislation at the state level;
(2) The most recent
conformity legislation requires states to offer unemployed workers the option
of having the employment security department withhold federal income tax from
unemployment insurance benefits;
(3) Unemployment
benefits have been subject to income tax for several years, and voluntary
withholding is a reasonable strategy some claimants will use to spread the
payment of their federal income tax liability over several weeks or months
rather than a single payment at income tax time; and
(4) Conformity with
federal law supports the federal and state partnership and responds to the
needs of this state's unemployed workers.
NEW SECTION. Sec.
2. A new section is added
to chapter 50.20 RCW to read as follows:
(1) An individual
filing a new claim for unemployment insurance must, at the time of filing such
claim, be advised that:
(a) Unemployment
insurance is subject to federal income tax;
(b) Requirements exist
pertaining to estimated tax payments;
(c) The individual may
elect to have federal income tax deducted and withheld from the individual's
payment of unemployment insurance at the amount specified in the federal
internal revenue code; and
(d) The individual is
permitted to change a previously elected withholding status.
(2) Amounts deducted
and withheld from unemployment compensation must remain in the unemployment
fund until transferred to the federal taxing authority as a payment of income
tax.
(3) The commissioner
shall follow all procedures specified by the United States department of labor
and the federal internal revenue service pertaining to the deducting and
withholding of income tax.
(4) The commissioner
shall adopt rules to implement this section. Amounts shall be deducted and
withheld in accordance with the priorities established in rules adopted by the
commissioner.
NEW SECTION. Sec.
3. If any part of this act
is found to be in conflict with federal requirements that are a prescribed
condition to the allocation of federal funds to the state or the eligibility of
employers in this state for federal unemployment tax credits, the conflicting
part of this act is hereby declared to be inoperative solely to the extent of
the conflict, and such finding or determination shall not affect the operation
of the remainder of this act. The rules under this act shall meet federal
requirements that are a necessary condition to the receipt of federal funds by
the state or the granting of federal unemployment tax credits to employers in
this state.
NEW SECTION. Sec.
4. If any provision of this
act or its application to any person or circumstance is held invalid, the
remainder of the act or the application of the provision to other persons or
circumstances is not affected.
NEW
SECTION. Sec. 5. This act shall take
effect December 31, 1996, and shall apply to payments made after December 31,
1996.
