Senate Bill No. 516
(By Senators Harrison, Sprouse, Rowe, Guills, Hunter, Unger,
McCabe, Oliverio, Smith, Weeks, Facemyer, Minard, Jenkins,
Caldwell, Fanning, White, Sharpe, Ross, Dempsey, Love, Minear,
Boley, Edgell and Bowman)
[Introduced February 13, 2003; referred to the Committee on
A BILL to amend and reenact section ten, article twenty-one,
chapter eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to personal income
tax; and increasing the low-income exclusion.
Be it enacted by the Legislature of West Virginia:
That section ten, article twenty-one, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
PART I. GENERAL.
§11-21-10. Low income exclusion.
(a) Earned income exclusion. -- In the case of an eligible taxpayer, effective the first day of January, two thousand three
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 eighteen thousand dollars, except that
when a husband and wife file separate returns under this article
this exclusion shall may not exceed five nine 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
(b) "Eligible taxpayer" defined. -- The term "eligible
(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 eighteen thousand dollars or less for the
taxable year; or
(2) Any husband or wife filing a separate return under this
article who has federal adjusted gross income of
five nine thousand
dollars or less.
(c) "Earned income" defined. --
(1) The term "earned income" means:
(A) Wages, salaries, tips and other employee compensation;
(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
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 may be allowed under this section in the
case of a taxable year covering a period of less than twelve
NOTE: The purpose of this bill is to increase the low income
exclusion for personal income tax.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would