FISCAL NOTE
Date Requested: February 11, 2020
Time Requested: 04:14 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1199 |
Introduced |
HB4940 |
|
|---|
| CBD Subject: |
Juveniles, Taxation |
|---|
|
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 the bill is to provide a $500 tax credit per child for taxpayers who have foster children in their care.
The proposed bill would allow the taxpayer to take a tax credit of $500 per foster child in their care during that taxable year. If the foster child is in foster care for only a portion of the year, the credit will be prorated. The bill does not detail how the proration is to be done. The revenue loss associated with this proposal cannot be readily determined. However, the revenue loss could be significant.
Additional administrative costs to the State Tax Department would be $51,000 for FY2022 and $40,000 for subsequent years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2020
Increase/Decrease
(use"-") |
2021
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
40,000 |
| Personal Services |
0 |
0 |
40,000 |
| 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 |
0 |
Explanation of above estimates (including long-range effect):
The proposed bill would allow the taxpayer to take a tax credit of $500 per foster child in their care during that taxable year. If the foster child is in foster care for only a portion of the year, the credit will be prorated. The bill does not detail how the proration is to be done. The revenue loss associated with this proposal cannot be readily determined. However, the revenue loss could be significant. There is an average of 5,600 children in foster care within the state; this excludes children that are residing in a group home or facility.
Additional administrative costs to the State Tax Department would be $51,000 for FY2022 and $40,000 for subsequent years.
Memorandum
The stated purpose of the bill is to provide $500 per child tax credit for taxpayers who have foster children in their care.
This is a tax credit against personal income tax for any foster family who has a foster child in their care. This credit is equal to $500 per child for each year the child is in the foster care of the family. The bill states that the credit must be taken for the year the child is in foster care. If a child is in foster care for only a portion of a year, the credit is to be pro-rated. The bill may have been attempting to pro-rate the time spent with the foster family rather than the time spent in foster care, but that is not clear based upon the language of the bill.
The language of the bill does not address the situation where a child has been in foster care for an entire year but has been placed with several different families during that time. It is unclear if the credit is to pro-rated where a child has been with an individual foster family for less than a year, even if the child has been in foster care for the entire year.
It is possible one foster family may have multiple foster children in their home, or that one child might in many foster homes during the year. The bill does not limit this credit to non-relative provided foster care.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov