Senate Bill No. 538
(By Senators Wells, Foster, Plymale, Barnes, Green, Sypolt,
Kessler, Jenkins, Palumbo, D. Facemire, Unger and White)
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[Introduced March 11, 2009; referred to the Committee on
Finance.]
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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. Working family tax credit.
In order to eliminate West Virginia personal income tax on
families with low incomes and to reduce the West Virginia personal
income tax on working families with moderate incomes, there is
hereby created a refundable tax credit, to be known as the working families tax credit, against the West Virginia personal income tax.
The working families tax credit is based upon the federal earned
income tax credit.
§11-21-22b. Amount of credit.
(a) For each taxable year beginning on or after January 1,
2007, 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 January
1, 2007, 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 $300 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
$300 above the federal poverty guidelines but does not exceed $600
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
$600 above the federal poverty guidelines but does not exceed $900
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
$900 above the federal poverty guidelines but does not exceed
$1,200 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
$1,200 above the federal poverty guidelines but does not exceed
$1,500 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
$1,500 above the federal poverty guidelines but does not exceed
$1,800 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
$1,800 above the federal poverty guidelines but does not exceed
$2,100 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
$2,100 above the federal poverty guidelines but does not exceed
$2,400 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
$2,400 above the federal poverty guidelines but does not exceed
$2,700 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
$150 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
$150 above fifty percent of the federal poverty guidelines but does
not exceed $300 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
$300 above fifty percent of the federal poverty guidelines but does
not exceed $450 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
$450 above fifty percent of the federal poverty guidelines but does
not exceed $600 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 $600 above fifty percent of the federal poverty guidelines but does
not exceed $750 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
$750 above fifty percent of the federal poverty guidelines but does
not exceed $900 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
$900 above fifty percent of the federal poverty guidelines but does
not exceed $1,050 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
$1,050 above fifty percent of the federal poverty guidelines but
does not exceed $1,200 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 $1,200 above fifty percent of the federal poverty guidelines but
does not exceed $1,350 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) 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.
(e) For each taxable year beginning on or after January 1,
2009:
(1) A taxpayer is allowed a tax credit equal to ten 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 tax payers who may be eligible to receive the tax credit.
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.
§11-21-22 is completely rewritten; therefore, strike-throughs
and underscoring have been omitted.
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