FISCAL NOTE
Date Requested: February 07, 2019
Time Requested: 09:12 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2891 |
Introduced |
HB2848 |
|
|---|
| CBD Subject: |
Health |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to make amendments to the West Virginia ABLE Act and add a reduction in federal adjusted gross income for West Virginia personal income taxes. The bill adds and clarifies definitions to conform to federal law; adds an attorney in fact and a parent to the persons authorized to create or manage West Virginia ABLE Act accounts as permitted by federal law; amends the age of eligible individuals to conform to federal law; clarifies that a guardian may manage an ABLE account regardless of the amount of a designated beneficiary’s assets and that the Department of Health and Human Resources may not manage an ABLE account; adds an FEIN to the application requirements; authorizing the minimum account value to be the value established by the state of the program manager contracting with the Treasurer; clarifies that moneys in a West Virginia ABLE Act account or from a qualified withdrawal are to be disregarded when determining eligibility for or the amount of public assistance unless required by federal law, are not subject to claims of the Department of Health and Human Resources unless required by federal law, and on the death of a designed beneficiary shall be transferred to the estate of the designated beneficiary unless prohibited by federal law; and authorizes contributions to West Virginia ABLE Act accounts to be subtracted from federal adjusted gross income for purposes of West Virginia personal income taxes and the recapture of the amounts subtracted if used for purposes other than a qualified disability expense. In addition, the bill makes various technical revisions.
The bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of contributions made to an ABLE account. According to our interpretation, passage of the bill would reduce General Revenue Fund collections by roughly $200,000 in FY2021. The proposed tax exclusion can grow in the near term given that the West Virginia ABLE program is new, and its utilization will likely increase.
Additional administrative costs incurred by the State Tax Department would be $15,000 in FY2021 and $5,000 in each of the fiscal years thereafter.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
5,000 |
| Personal Services |
0 |
0 |
5,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-200,000 |
Explanation of above estimates (including long-range effect):
The bill proposes a modification that would reduce federal adjusted gross income, for West Virginia Personal Income Tax purposes, by the amount of contributions made to an ABLE account. According to our interpretation, passage of the bill would reduce General Revenue Fund collections by roughly $200,000 in FY2021. The proposed tax exclusion can grow in the near term given that the West Virginia ABLE program is new, and its utilization will likely increase.
Additional administrative costs incurred by the State Tax Department would be $15,000 in FY2021 and $5,000 in each of the fiscal years thereafter.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov