Senate Bill No. 568
(By Senators Harrison, Rowe and Hunter)
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[Introduced February 19, 2004; 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 tying
the low-income exclusion to federal poverty guidelines.
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 the United States Department of Health and Human
Services poverty guidelines published in the Federal Register.
(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 or less for the taxable year
less than or equal to the United States Department of Health and
Human Services poverty guidelines published in the Federal
Register; or
(2) Any husband or wife filing a separate return under this
article who has federal adjusted gross income of
five thousand
dollars or less
than or equal to the United States Department of
Health and Human Services poverty guidelines published in the
Federal Register.
(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 tie the personal low
income tax exclusion to federal poverty guidelines.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.