H. B. 4116
(By Delegates Fleischauer, Klempa, Caputo, Swartzmiller,
Evans, Tucker, Eldridge, Carmichael, Anderson, Doyle and Boggs)
[Introduced January 21, 2008; referred to the
Committee on Finance.]
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. Low-income family tax credit.
In order to eliminate West Virginia personal income tax on
families with incomes below the federal poverty guidelines and to
reduce the West Virginia personal income tax on families with
incomes that are immediately above the federal poverty guidelines,
there is hereby created a
nonrefundable refundable tax credit, to
be known as the low-income family tax credit, against the West
Virginia personal income tax. The low-income family tax credit is based upon family size and the federal poverty guidelines and
reduces the tax imposed by the provisions of this article on
families with modified federal adjusted gross income below or near
the federal poverty guidelines.
§11-21-22b. Amount of credit.
(a) For each taxable year beginning on or after the first day
of January, two thousand seven, 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 the first day of January, two thousand seven, 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 three hundred
dollars 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
three hundred dollars above the federal poverty guidelines but does
not exceed six hundred dollars 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
six hundred dollars above the federal poverty guidelines but does
not exceed nine hundred dollars 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
nine hundred dollars above the federal poverty guidelines but does
not exceed one thousand two hundred dollars 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
one thousand two hundred dollars above the federal poverty
guidelines but does not exceed one thousand five hundred dollars
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
one thousand five hundred dollars above the federal poverty
guidelines but does not exceed one thousand eight hundred dollars
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
one thousand eight hundred dollars above the federal poverty
guidelines but does not exceed two thousand one hundred dollars
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
two thousand one hundred dollars above the federal poverty
guidelines but does not exceed two thousand four hundred dollars
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
two thousand four hundred dollars above the federal poverty
guidelines but does not exceed two thousand seven hundred dollars
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
one hundred fifty dollars 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
one hundred fifty dollars above fifty percent of the federal
poverty guidelines but does not exceed three hundred dollars 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
three hundred dollars above fifty percent of the federal poverty
guidelines but does not exceed four hundred fifty dollars 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
four hundred fifty dollars above fifty percent of the federal
poverty guidelines but does not exceed six hundred dollars 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
six hundred dollars above fifty percent of the federal poverty
guidelines but does not exceed seven hundred fifty dollars 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
seven hundred fifty dollars above fifty percent of the federal
poverty guidelines but does not exceed nine hundred dollars 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
nine hundred dollars above fifty percent of the federal poverty
guidelines but does not exceed one thousand fifty dollars 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 one thousand fifty dollars above fifty percent of the federal
poverty guidelines but does not exceed one thousand two hundred
dollars 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
one thousand two hundred dollars above fifty percent of the federal
poverty guidelines but does not exceed one thousand three hundred
hundred fifty dollars 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) For each taxable year beginning on or after the first day
of January, two thousand eight:
(1) A taxpayer shall be allowed a tax credit equal to twenty
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 taxpayers who may be eligible to receive the tax credit.
(d) (e) 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.
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.