H. B. 4074


(By Mr. Speaker, Mr. Kiss, and Delegates Fleischauer,

Caputo, C. White, Leach, Poling and Boggs)


[Introduced January 17, 2002; referred to the

Committee on Finance.]




A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twenty-one-a, relating to the "West Virginia Earned Income Tax Credit Act"; providing for a tax credit equal to twenty percent of the earned income credit allowed under section thirty-two of the Internal Revenue Code; providing the credit is allowed exceeds the tax, that it is treated as an overpayment; authorizing spouses who file separately to apply the credit as they elect; requiring the tax commissioner to provide notice to eligible taxpayers regarding their eligibility; and, requiring the tax commissioner to prepare a written report regarding the credit.

Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twenty-one-a, to read as follows:
ARTICLE 21A. WEST VIRGINIA EARNED INCOME TAX CREDIT.
§11-21A-1.  Short title.

This article shall be called the West Virginia Earned Income Tax Credit.
§11-21A-2. Earned income tax credit.
(a) A resident taxpayer shall be allowed a tax credit equal to twenty percent of the earned income credit allowed under section thirty-two of the Internal Revenue Code, as amended and in effect for the current taxable year.
(b) The credit under this article shall be allowed against the taxes imposed by this chapter for the taxable year reduced by other credits permitted by this article. If the credit exceeds the tax as so reduced, the tax commissioner shall treat the excess as an overpayment, and shall pay the resident taxpayer, without interest, the amount of the excess.
(c) In the case of a husband and wife who file their state tax returns separately, the credit allowed pursuant to this article may be applied against the tax of either, or divided between them, as they elect.
(d) The tax commissioner shall make efforts every year to alert resident taxpayers who may be eligible to receive the credit under this article. In making a determination as to whether a taxpayer may be eligible for a credit, the tax commissioner shall use the data as may be appropriate and available, including, but not limited to, data available from the United States Department of Treasury, the Internal Revenue Service, and state income tax returns from preceding tax years.
(e) The tax commissioner shall prepare a written report each year which will contain statistical information regarding the credits granted for the prior calender year. The reports shall contain, but need not be limited to, the total amount of revenue expended on the earned income tax credit; the number of credits claimed; and the average value of the credits granted to taxpayers whose earned income falls within various income ranges.
(f) The provisions of this article shall take effect for taxable years two thousand three and each year thereafter.

NOTE: The purpose of this bill is to create the "West Virginia Earned Income Tax Credit Act". The bill provides for a tax credit equal to twenty percent of the earned income credit allowed under section thirty-two of the Internal Revenue Code. It also provides that if the credit allowed exceeds the tax, that it is treated as an overpayment. The bill further authorizes spouses who file separately to apply the credit as they elect. It requires the tax commissioner to provide notice to eligible taxpayors regarding their eligibility for the credit and it also requires the tax commissioner to prepare a written report regarding the credit.

This article is new; therefore, strike-throughs and underscoring have been omitted.