FISCAL NOTE
Date Requested: January 31, 2020
Time Requested: 11:11 AM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2506 |
Introduced |
HB4630 |
|
|---|
| CBD Subject: |
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 $1,000 per child refundable tax credit for taxpayers who have foster children in their care.
The proposed bill would allow the taxpayer to take a refundable tax credit of $1,000 per foster child in their care. Only one taxpayer per household, the taxpayer with the highest AGI, may take the credit. Taxpayers filing married filing jointly shall be considered as one individual. The foster child must be in the care of the taxpayer for six months and eighteen consecutive days within a calendar month is considered a month. The estimated revenue loss with this Personal Income Tax credit would be estimated at $5.5 million for FY2022 and all subsequent years.
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 |
-5,500,000 |
Explanation of above estimates (including long-range effect):
The proposed bill would allow the taxpayer to take a refundable tax credit of $1,000 per foster child in their care. Only one taxpayer per household, the taxpayer with the highest AGI, may take the credit. Taxpayers filing married filing jointly shall be considered as one individual. The foster child must be in the care of the taxpayer for six months and eighteen consecutive days within a calendar month is considered a month. The estimated revenue loss with this Personal Income Tax credit would be estimated at $5.5 million for FY2022 and all subsequent years.
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 $1,000 per child refundable tax credit for taxpayers who have foster children in their care.
This is a refundable credit against Personal Income Tax for any taxpayer who has a foster child in his or her care. This credit is equal to $1,000 per child when the child has been in foster care with that family at least six calendar months of the year (more than 18 consecutive days in a calendar month is treated as a full month). The credit must be taken for the year in which the child was in foster care. Only one taxpayer in the household, the one with the highest AGI for the year, may claim the credit and married filing joint returns shall be treated as one taxpayer.
It is possible that one taxpayer may have multiple foster children in their home, or that one child might be in two different foster homes during the year since the threshold is six months. It would prevent exploitation of the credit if “foster care”; “foster child” and “family” were defined. The bill does not require the child’s placement of six months to be consecutive and it does not limit this credit to non-relative provided foster care. The bill is not clear regarding whether the credit applies if the child is in a facility placement, or if the placement facility is a corporation. Further, it is not clear if a taxpayer who keeps a child for a year would be entitled to two credits.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov