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To encourage workers to return to work as businesses reopen following the COVID-19 shutdown, Idaho Governor Brad Little (Republican) ordered the creation of the Idaho Return to Workprogram that provides bonuses of up to $1,500 for employees currently receiving unemployment insurance (UI) benefits due to the COVID-19 and who return to work.

The Idaho State Tax Commission, which administers the program, issued guidance for employers on how to apply for the bonus on behalf their employees starting July 13, 2020. (Executive order 2020-12; news release, Idaho State Tax Commission.)

Under the Governor's order, the worker must meet all the following requirements:

• The worker filed for UI benefits during the COVID-19 emergency on or after March 1, 2020
• The worker returned to work for a nongovernmental employer no later than July 1, 2020
• The worker makes $75,000 or less annually
• The worker meets the part-time (20 hours) or full-time (30 hours) thresholds in the four weeks immediately following the return to work
• The position for which the worker returned to work is intended to be an ongoing position beyond the four-week period
• The worker has not previously received a return-to-work bonus

According to the Rebound Idaho website, a recent study revealed that more than 60% of US workers furloughed or laid off due to the COVID-19 emergency are, through state and federal programs, earning more while on UI benefits than they would have earned continuing to work for their employers. The Governor is offering this one-time bonus to offset the loss of UI benefits caused by the return to work.

Idaho has set aside $100 million in federal coronavirus relief funds to cover the cost of the bonuses. The bonuses, which must be applied for electronically by the workers' employers, will be awarded on a first-come, first-served basis until the $100 million is exhausted.

Details

One-time cash bonuses of $1,500 for full-time work (defined as a minimum of 30 hours per week for the four weeks following the return to work) and $750 for part-time work (defined as a minimum of 20 hours per week for the four weeks following the return to work) are available to workers after they return to work.

Eligible employees need not have worked for the applying employer prior to the COVID-19 emergency. In other works, the employee receiving the bonus may be a new hire.

The Tax Commission will accept submissions starting at noon on July 13, 2020 for workers who returned to work after collecting UI benefits from May 1, 2020 through June 14, 2020.

A second wave of applications will open on July 20, 2020 for employees who return to work through July 1, 2020.

Applications will be accepted through August 7, 2020; but note, as reported above, once the $100 million in federal funds is exhausted, bonuses will cease.

Employers must apply electronically for the bonuses on behalf of employees, using the Tax Commission's Taxpayer Access Point (TAP) system; paper applications will not be accepted.

Businesses and third-party service providers that do not currently have a TAP account are encouraged to start the registration process immediately to establish an account in time to apply for the bonuses.

An employer eligible to apply for the bonus on behalf of an employee must be one which that issues Forms W-2 to employees directly or through a third-party service provider.

Note that the Rebound Idaho website indicates that to be eligible for the bonus, employees must be Idaho residents who have worked for an Idaho employer in 2020.

To be eligible for the bonus, an employee must have a valid Social Security number issued by the Social Security Administration. Employees who have been issued an Individual Taxpayer Identification Number (ITIN) are not eligible for the bonus.

Employees who work for two or more employers are only eligible for one bonus. The bonus amount will be based on the job where the employee works the largest number of hours per week.

The website states that employers can help the application approval process go quicker by making sure to report new and returning employees to the Idaho Department of Labor's new-hire reporting center.

The state anticipates that a bonus will be issued to the employee approximately one week after the application is approved.

For more information, send an email to ReboundIdahoBusinessGrants@tax.idaho.gov?or call +1 833 492 0068.

Ernst & Young LLP insights

As previously reported (EY Tax Alert 2020-1472), Representative Kevin Brady, ranking Republican member on the House Ways and Means Committee, introduced H.R. 7066, Reopening America by Supporting Workers and Businesses Act of 2020, which, like Idaho's program, would offer a bonus to employees receiving UI benefits who return to work.

Under the Brady bill, the bonus amount would be $1,200, lower than the $1,500 offered by Idaho. This federal bill has seen no movement in the House since it was first referred to the House Committee on Ways and Means on June 1, 2020.

White House economic advisor Larry Kudlow told Fox News on May 27, 2020, that the Trump Administration is open to the back-to-work bonus for the unemployed who return to work.

Senator Rob Portman (R-OH) has made a similar proposal, though his bonus would be $450 per week.

Given the national interest for return-to-work bonuses, it is likely that other conservative states may join Idaho in offering a state bonus program.

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