Exemptions for severance, unemployment compensation, etc.

(a) Effective for the 1997 state income tax year and each year thereafter, an amount up to twenty-five thousand dollars ($25,000) received as severance, unemployment compensation or termination pay, or as income from a supplemental income plan, or both, by an employee who, as a result of administrative downsizing, is terminated, laid-off, fired, or displaced from his or her employment, shall be exempt from any state, county, or municipal income tax.

(b) An employee whose termination from employment is due to misconduct shall not be allowed to take the tax exemption provided in subsection (a).

(c) The Department of Revenue shall promulgate rules and regulations to administer this section.

(Acts 1997, No. 97-705, p. 1456, §1.)