DOVER — Legislation to provide unemployment tax relief to individuals and businesses impacted by the pandemic was signed by Gov. John Carney on Monday.

House Bill 65 passed the General Assembly unanimously last month and is now law.

The measure, which was formally introduced just four weeks ago, exempts unemployment benefits paid in 2020 from Delaware state income tax, maintains the new employer tax rates at 2020 levels and waives the 13-week waiting period before the state can trigger extended benefits.

More than 100,000 Delawareans have filed for unemployment since the start of the pandemic, with the state’s Division of Unemployment Insurance paying out more than $965 million in 2020, compared to about $67 million in 2019. As of November, 5.3% of residents were out of work, up from 4% 12 months prior.

Exempting unemployment benefits from state taxes allows Delawareans who filed for unemployment to keep a combined $21 million.

“Thousands of hard-working Delawareans have lost their jobs during the past year through no fault of their own, putting them in a difficult position at one of the worst times possible. We owe it to those impacted by the pandemic to take whatever action we can to ease their burden,” Rep. Ed Osienski, a Newark Democrat and the bill’s main sponsor, said in a statement.

“Exempting the unemployment benefits that have been a lifeline to so many families will mean that they aren’t blindsided when they file their state taxes this year, keeping a little more money in their pockets. We’re also taking steps to protect businesses so they aren’t penalized with higher taxes during the pandemic, which hopefully will help them keep their doors open.”

The legislation establishes the 2021 new employer assessment, average industry assessment and average construction industry assessment rates at the same rate as 2020 to avoid an increase as a result of the jump in unemployment claims due to COVID-19.

Maintaining the new employer tax rates at 2020 levels is expected to benefit more than 2,000 businesses, per the House Democratic caucus. Holding the new employer tax rate at 1.8% will save employers up to $264 per employee in 2021, while keeping the new construction employer tax rate at 2.3% will save up to $165 per worker in 2021, according to the Division of Unemployment Insurance.

“Taxes are quickly coming due for thousands of Delawareans who have made less, had fewer opportunities, and been put out of work by the pandemic,” Sen. Jack Walsh, a Stanton Democrat who was the lead Senate sponsor, said in a statement. “In a tax year defined by unemployment and shuttered businesses, it’s on all of us in state government to extend relief that is straightforward, effective, and gets where it needs to go on time. This bill does that, both for our small businesses and for the tens of thousands of workers who filed for unemployment last year.”

The measure also extends the Department of Labor’s ability to issue emergency rules amending the Delaware Unemployment Insurance Code to deal with the effects of COVID-19 and implement federal programs providing unemployment benefits to respond to COVID-19. The General Assembly previously granted this authority, but it was slated to expire at the end of March. The bill grants that authority until March 2022.