H. B. 2499
(By Delegates Cann, Stalnaker, Perdue and Perry)
[Introduced January 24, 2007; referred to the
Committee on Finance.]
A BILL to amend and reenact §11-21-10 of the Code of West Virginia,
1931, as amended, relating to the low income exclusion of the
personal income tax.
Be it enacted by the Legislature of West Virginia:
That §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 may 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 That for the taxable year beginning the first day
of January, two thousand eight, the exclusion provided in this
section is increased to twenty-two thousand dollars, except that
when a husband and wife file separate returns under this article
this exclusion may not exceed eleven thousand dollars per separate
return
.
(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:
Provided, That for tax years beginning the first day of January,
two thousand eight, the federal adjusted gross income amount is
increased to twenty-two thousand dollars or less for the taxable
year; 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: Provided, That for tax years beginning the first
day of January, two thousand seven, the federal adjusted gross income amount is increased to eleven thousand dollars or less for
the taxable year.
(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 may 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 may
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 is 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 increase the earned
income exclusion from ten thousand dollars to twenty-two thousand
dollars.
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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