Senate Bill No. 274
(By Senator Cann)
[Introduced January 8, 2014; referred to the Committee on Education; and then to the Committee on Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-21-10b, relating to personal income tax; and enacting the College Graduate Tax Credit.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-21-10b, to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-10b. College Graduate Tax Credit.
(a) A credit shall be allowed against the tax imposed by this article equal to the amount of principal and interest paid by graduates of qualified institutions of higher learning for repayment of qualified student loans used to pay for qualified education expense incurred to attend qualified institutions of higher learning. This credit is available for taxpayers graduating on or after January 1, 2015, and is applied in the year of graduation from a qualified institution of higher learning and for the next succeeding nine tax years following graduation from a qualified institution of higher learning. The annual tax credit authorized by this section is equal to the lesser of one tenth of the principal amount of the graduate’s qualified student loans plus interest paid in the tax year or the amount of principal and interest paid during the tax year but shall not exceed the taxpayer’s personal income tax liability as calculated under the provisions of this article for the tax year for which the credit is claimed. Any annual credit remaining after application of the credit in any tax year may not be carried-over to another succeeding tax year nor carried-back to a prior tax year but is forfeited. Only qualified student loans used to obtain a baccalaureate degree, a graduate degree or a professional degree from a qualified institution of higher learning are eligible for the credit allowed by this section. Only qualified student loans with interest liability of $600 or more annually are eligible for the credit allowed by this section. Only the individual graduate is eligible for the credit allowed by this section.
(1) “Graduate” means a graduate of a qualified institution of higher learning who has been awarded a baccalaureate degree, a graduate degree or a professional degree by the qualified institution of higher learning.
(2) “Qualified education expense” means the cost of tuition and fees, room and board, books and necessary supplies and equipment directly related to the course of education pursued at a qualified institution of higher learning.
(3) “Qualified institution of higher learning” means an institution that instructs students and awards baccalaureate degrees, graduate degrees or professional degrees and which holds accreditation by an accrediting agency or association determined by the United States Secretary of Education, under section one thousand ninety-nine-b, title twenty, United States Code, to be a reliable authority for accreditation.
(4) “Qualified student loan” means a loan taken out in the name of the taxpayer claiming the credit authorized by this section and used solely to pay qualified education expenses for education resulting in the award of a baccalaureate degree, a graduate degree or a professional degree by a qualified institution of higher learning.
(c) Administration: For purposes of administering the provisions of this section, Internal Revenue Service Form 1098E shall be used to provide the necessary information relating to the identity of the graduate claiming the credit and the qualified student loan interest amount. The Tax Commissioner may prescribe such other forms, schedules, returns or filings as the Tax Commissioner may deem appropriate for claims of this credit.
NOTE: The purpose of this bill is to provide for a credit against West Virginia personal income tax liability in the amount of payments made on student loans.
§11-21-10b is new; therefore, strike-throughs and underscoring have been omitted.