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Introduced Version Senate Bill 595 History

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sb595 intr
Senate Bill No. 595

(By Senators Harrison, White, Hunter and Unger)

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[Introduced March 18, 2005; referred to the Committee

on Finance.]

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A BILL to amend and reenact §11-21-10 of the Code of West Virginia, 1931, as amended, relating to personal income tax; and changing the low-income exclusion.

Be it enacted by the Legislature of West Virginia:
That section §11-21-10 of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-10. Low-income exclusion.
(a) Earned income exclusion. -- In the case of an eligible taxpayer, there shall be is allowed as a deduction from federal adjusted gross income the amount of his or her earned income included therein, not to exceed ten thousand dollars, except that when a husband and wife file separate returns under this article this exclusion shall not exceed five thousand dollars per separate return: Provided, That for the taxable year beginning the first day of January, one thousand nine hundred ninety-six the exclusion provided for in this section shall apply only to earned income received after the thirtieth day of June, one thousand nine hundred ninety-six and the amount excluded shall not exceed fifty percent of the annual low income exclusion amounts set forth in this subsection
ten thousand dollars for forms with one exemption claimed; thirteen thousand dollars for forms with two exemptions claimed; sixteen thousand dollars for forms with three exemptions claimed; nineteen thousand dollars for forms with four exemptions claimed; twenty-three thousand dollars for forms with five exemptions claimed; twenty-six thousand dollars for forms with six exemptions claimed; twenty-nine thousand dollars for forms with seven exemptions claimed; or thirty-two thousand dollars for forms with eight or more exemptions claimed.
(b) "Eligible taxpayer" defined. -- The term "eligible taxpayer" means:
(1) Any unmarried individual and any husband and wife filing a joint return under this article who has or have federal adjusted gross income of ten thousand dollars for forms with one exemption claimed; thirteen thousand dollars for forms with two exemptions claimed; sixteen thousand dollars for forms with three exemptions claimed; nineteen thousand dollars for forms with four exemptions claimed; twenty-three thousand dollars for forms with five exemptions claimed; twenty-six thousand dollars for forms with six exemptions claimed; twenty-nine thousand dollars for forms with seven exemptions claimed; or thirty-two thousand dollars for forms with eight or more exemptions claimed.

(2) Any husband or wife filing a separate return under this article who has federal adjusted gross income of five thousand dollars or less ten thousand dollars for forms with one exemption claimed; thirteen thousand dollars for forms with two exemptions claimed; sixteen thousand dollars for forms with three exemptions claimed; nineteen thousand dollars for forms with four exemptions claimed; twenty-three thousand dollars for forms with five exemptions claimed; twenty-six thousand dollars for forms with six exemptions claimed; twenty-nine thousand dollars for forms with seven exemptions claimed; or thirty-two thousand dollars for forms with eight or more exemptions claimed.
(c) "Earned income" defined. --
(1) The term "earned income" means:
(A) Wages, salaries, tips and other employee compensation; plus
(B) The amount of the taxpayer's net earnings from self-employment for the taxable year (within the meaning of section 1402 (a) of the Internal Revenue Code), but such net earnings shall be determined with regard to the deduction allowed to the taxpayer under section 164 of the Internal Revenue Code.
(2) For purposes of this section:
(A) The earned income of an individual shall be computed without regard to any community property laws;
(B) No amount received as pension or annuity shall be taken into account; and
(C) No amount received for services provided by an individual while the individual is an inmate at a penal institution shall be taken into account.
(d) Taxable year must be full taxable year. -- Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowed under this section in the case of a taxable year covering a period of less than twelve months.

NOTE: The purpose of this bill is to change the personal low income tax exclusion.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

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