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Introduced Version House Bill 4116 History

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hb4116 intr
H. B. 4116


(By Delegates Fleischauer, Klempa, Caputo, Swartzmiller,
Evans, Tucker, Eldridge, Carmichael, Anderson, Doyle and Boggs)


[Introduced January 21, 2008; referred to the
Committee on Finance.]


A BILL to amend and reenact §11-21-22 and §11-21-22b of the Code of West Virginia, 1931, as amended, all relating to personal income tax and authorizing a refundable tax credit based on federal poverty guidelines.

Be it enacted by the Legislature of West Virginia:
That §11-21-22 and §11-21-22b of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
PART I. GENERAL.

§11-21-22. Low-income family tax credit.

In order to eliminate West Virginia personal income tax on families with incomes below the federal poverty guidelines and to reduce the West Virginia personal income tax on families with incomes that are immediately above the federal poverty guidelines, there is hereby created a nonrefundable refundable tax credit, to be known as the low-income family tax credit, against the West Virginia personal income tax. The low-income family tax credit is based upon family size and the federal poverty guidelines and reduces the tax imposed by the provisions of this article on families with modified federal adjusted gross income below or near the federal poverty guidelines.
§11-21-22b. Amount of credit.
(a) For each taxable year beginning on or after the first day of January, two thousand seven, the tax credit authorized by section twenty-two of this article may be used by every qualified taxpayer and shall be calculated in accordance with subsections (b) and (c) of this section: Provided, That for the taxable year beginning on the first day of January, two thousand seven, the qualified taxpayer shall be allowed to claim only fifty percent of the amount of the tax credit.
(b) Qualified taxpayers who file as an individual, as a head of household, as a husband and wife who file a joint return, or as an individual entitled to file as a surviving spouse shall be entitled to a tax credit based on the following:
(1) If modified federal adjusted gross income is at or below the federal poverty guidelines based on family size, the credit shall be an amount equal to the amount of tax owed under this article by the qualified taxpayer;
(2) If modified federal adjusted gross income is greater than the federal poverty guidelines but does not exceed three hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be ninety percent of the amount of tax owed under this article by the qualified taxpayer;
(3) If modified federal adjusted gross income is greater than three hundred dollars above the federal poverty guidelines but does not exceed six hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be eighty percent of the amount of tax owed under this article by the qualified taxpayer;
(4) If modified federal adjusted gross income is greater than six hundred dollars above the federal poverty guidelines but does not exceed nine hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be seventy percent of the amount of tax owed under this article by the qualified taxpayer;
(5) If modified federal adjusted gross income is greater than nine hundred dollars above the federal poverty guidelines but does not exceed one thousand two hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be sixty percent of the amount of tax owed under this article by the qualified taxpayer;
(6) If modified federal adjusted gross income is greater than one thousand two hundred dollars above the federal poverty guidelines but does not exceed one thousand five hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be fifty percent of the amount of tax owed under this article by the qualified taxpayer;
(7) If modified federal adjusted gross income is greater than one thousand five hundred dollars above the federal poverty guidelines but does not exceed one thousand eight hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be forty percent of the amount of tax owed under this article by the qualified taxpayer;
(8) If modified federal adjusted gross income is greater than one thousand eight hundred dollars above the federal poverty guidelines but does not exceed two thousand one hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be thirty percent of the amount of tax owed under this article by the qualified taxpayer;
(9) If modified federal adjusted gross income is greater than two thousand one hundred dollars above the federal poverty guidelines but does not exceed two thousand four hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be twenty percent of the amount of tax owed under this article by the qualified taxpayer; or
(10) If modified federal adjusted gross income is greater than two thousand four hundred dollars above the federal poverty guidelines but does not exceed two thousand seven hundred dollars above the federal poverty guidelines based on family size, the amount of credit allowable shall be ten percent of the amount of tax owed under this article by the qualified taxpayer.
(c) Qualified taxpayers who are husband and wife and who file separate returns shall be entitled to a tax credit based on the following:
(1) If modified federal adjusted gross income is at or below fifty percent of the federal poverty guidelines based on family size, the credit shall be an amount equal to the amount of tax owed under this article by the qualified taxpayer;
(2) If modified federal adjusted gross income is greater than fifty percent of the federal poverty guidelines but does not exceed one hundred fifty dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be ninety percent of the amount of tax owed under this article by the qualified taxpayer;
(3) If modified federal adjusted gross income is greater than one hundred fifty dollars above fifty percent of the federal poverty guidelines but does not exceed three hundred dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be eighty percent of the amount of tax owed under this article by the qualified taxpayer; (4) If modified federal adjusted gross income is greater than three hundred dollars above fifty percent of the federal poverty guidelines but does not exceed four hundred fifty dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be seventy percent of the amount of tax owed under this article by the qualified taxpayer;
(5) If modified federal adjusted gross income is greater than four hundred fifty dollars above fifty percent of the federal poverty guidelines but does not exceed six hundred dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be sixty percent of the amount of tax owed under this article by the qualified taxpayer;
(6) If modified federal adjusted gross income is greater than six hundred dollars above fifty percent of the federal poverty guidelines but does not exceed seven hundred fifty dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be fifty percent of the amount of tax owed under this article by the qualified taxpayer;
(7) If modified federal adjusted gross income is greater than seven hundred fifty dollars above fifty percent of the federal poverty guidelines but does not exceed nine hundred dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be forty percent of the amount of tax owed under this article by the qualified taxpayer;
(8) If modified federal adjusted gross income is greater than nine hundred dollars above fifty percent of the federal poverty guidelines but does not exceed one thousand fifty dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be thirty percent of the amount of tax owed under this article by the qualified taxpayer;
(9) If modified federal adjusted gross income is greater than one thousand fifty dollars above fifty percent of the federal poverty guidelines but does not exceed one thousand two hundred dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit allowable shall be twenty percent of the amount of tax owed under this article by the qualified taxpayer; or
(10) If modified federal adjusted gross income is greater than one thousand two hundred dollars above fifty percent of the federal poverty guidelines but does not exceed one thousand three hundred hundred fifty dollars above fifty percent of the federal poverty guidelines based on family size, the amount of credit shall be ten percent of the amount of tax owed under this article by the qualified taxpayer.
(d) For each taxable year beginning on or after the first day of January, two thousand eight:
(1) A taxpayer shall be allowed a tax credit equal to twenty percent of the earned income credit allowed under section 32 of the federal Internal Revenue Code;
(2) If the credit exceeds tax owed, the Tax Commissioner shall treat the excess as an overpayment, and shall pay the taxpayer, without interest, the amount of the excess;
(3) When a married couple who file their state tax returns separately, the credit allowed may be applied against the tax of either, or divided between them, as they elect; and
(4) The Tax Commissioner shall make efforts every year to inform taxpayers who may be eligible to receive the tax credit.

(d) (e) The Tax Commissioner shall develop and publish on an annual basis two indexed tax credit tables. One tax table shall be for qualified taxpayers who file as an individual, as a head of household, as a husband and wife who file a joint return, or as an individual entitled to file as a surviving spouse and one tax table shall be for qualified taxpayers who are husband and wife and who file separate returns. The indexed tax credit tables shall be based on subsections (b) and (c) of this section.


NOTE: The purpose of this bill is to provide low-income workers with a refundable state tax credit based on the federal Earned Income Tax Credits. Current law provides for a nonrefundable tax credit.

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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