FISCAL NOTE
Date Requested: February 23, 2021
Time Requested: 12:29 PM |
| Agency: |
Tax & Revenue Department, WV State |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2203 |
Introduced |
HB2653 |
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|---|
| CBD Subject: |
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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 provide a tax exemption for income from a qualified retirement plan used to pay for long-term care.
The proposed bill would create a decreasing modification to federal adjusted gross income for any payment from a qualified retirement plan during the taxable year used to pay for long-term care at home or in a long-term care facility for either the taxpayer, the taxpayer’s spouse, or a qualified dependent. The modification is only allowed to the extent the amount is not included as a deduction when arriving at the taxpayer’s federal adjusted gross income for the taxable year in which the payment is made. The modification is capped at $100,000 per taxpayer per year and would be effective for tax years beginning on and after January 1, 2021. Based on our interpretation, the passage of the proposed legislation would decrease General Revenue Fund collections by $400,000 in FY2022 and in subsequent fiscal years.
Additional administrative costs incurred by the Tax Department would be $37,500 in FY2022, $27,500 in FY2023 and $22,500 in FY2024 and subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
37,500 |
22,500 |
| Personal Services |
0 |
22,500 |
22,500 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
15,000 |
0 |
| 2. Estimated Total Revenues |
0 |
-400,000 |
-400,000 |
Explanation of above estimates (including long-range effect):
The proposed bill would create a decreasing modification to federal adjusted gross income for any payment from a qualified retirement plan during the taxable year used to pay for long-term care at home or in a long-term care facility for either the taxpayer, the taxpayer’s spouse, or a qualified dependent. The modification is only allowed to the extent the amount is not included as a deduction when arriving at the taxpayer’s federal adjusted gross income for the taxable year in which the payment is made. The modification is capped at $100,000 per taxpayer per year and would be effective for tax years beginning on and after January 1, 2021. Based on our interpretation, the passage of the proposed legislation would decrease General Revenue Fund collections by $400,000 in FY2022 and in subsequent fiscal years.
Additional administrative costs incurred by the Tax Department would be $37,500 in FY2022, $27,500 in FY2023 and $22,500 in FY2024 and subsequent fiscal years.
Memorandum
The stated purpose of this bill is to provide a tax exemption for income from a qualified retirement plan used to pay for long-term care.
Section 11-21-12j is already part of the code as part of the ABLE Act. A new section may be 12m.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov