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Rep. Thanedar introduces tax relief bill for fired employees
The bill comes in the wake of sweeping federal workforce reductions.
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Staff Reporter
- Wed, 09, Apr 2025
- 13:22 EDT
- 110
Shri Thanedar / File Photo
Indian American Congressman Shri Thanedar (MI-13) introduced legislation that seeks to permanently exempt unemployment benefits from federal income taxation.
The Tax Relief for Fired Workers Act (H.R. 2655), seeks to amend the Internal Revenue Code by reversing a 1979 policy that subjected unemployment benefits to federal taxation.
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“Almost all welfare programs are exempt from federal income taxation,” Congressman Thanedar said in a statement. “For over 40 years, unemployment benefits were treated the same way. However, Americans have had to pay federal income taxes on unemployment benefits since 1979. By introducing the Tax Relief for Fired Workers Act, I’m working to correct this injustice and provide much needed tax relief to Americans who have suddenly fallen on hard times.”
Thanedar cited recent federal job losses as a key driver for the legislation. “With Trump and Musk firing more and more hard-working federal employees every day, we must give this much-needed tax relief to the many Americans who have and will lose their jobs due to the failures of this administration,” he said.
The bill has garnered support from Representatives Janelle Bynum (OR-5), Valerie Foushee (NC-4), Hank Johnson (GA-4), and Eleanor Holmes Norton (DC-At Large).
Representative Valerie Foushee also emphasized the impact of federal job cuts. “North Carolina alone is home to over 82,000 federal employees, and we must support our dedicated civil servants who may lose their jobs due to this Administration’s reckless actions.”
She added, “I’m proud to join Rep. Thanedar in introducing the Tax Relief for Fired Workers Act to provide crucial support to the hardworking Americans affected by Trump’s cuts by removing federal income taxes on unemployment benefits.”
The bill comes in the wake of sweeping federal workforce reductions. The U.S. Supreme Court recently allowed the termination of 16,000 probationary federal employees across multiple agencies. The Department of Homeland Security has also initiated buyouts and early retirement offers as part of a broader restructuring plan.
The bill now awaits committee consideration in the House.
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