H.
B.
4487
(By Delegates Harrison, Louisos and Henderson)
[Introduced February 16, 1994; referred to the
Committee on Finance.]
A BILL to amend article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section twenty-one, relating to taxation; personal income tax; and providing for a young child tax credit.
Be it enacted by the Legislature of West Virginia:
That article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section twenty-one, to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§
11-21-21. Young child tax credit act.
(a) In the case of an individual, there is allowed as a credit against the tax imposed by this article for the taxable year an amount equal to the dependent tax credit amount for the taxable year.
(b) For the purposes of this section:
(1) The young child tax credit amount for the taxable year is an amount equal to the sum of the applicable credit percentages of so much of the taxpayer's West Virginia taxable income as defined in section twelve of this article for such year as does not exceed ten thousand dollars.
(2) For the purposes of this section, the applicable credit percentage is:
(A) Five percent for any one qualified dependent child of the taxpayer;
(B) Five percent for a second qualified dependent child of the taxpayer other than the qualified dependent taken into account under subsection (a) of this section; and
(C) Five percent for a qualified dependent spouse.
(3) In the case of a taxpayer whose West Virginia taxable income for the taxable year exceeds thirty thousand dollars, the amount determined under subsection (b)(1) shall be reduced by an amount equal to the sum of the applicable phaseout percentages of such excess.
(c) For the purposes of this section the applicable phaseout percentage is:
(1) Five dollars for each one hundred dollars of income that exceeds the amount specified in paragraph (3) of this section for any qualified dependent; and
(2) Five dollars for each one hundred dollars that exceeds the amount specified in paragraph (3) of this section for each additional qualified dependent taken into account in paragraph (2)(B) of subsection (b) of this section.
(3) For the purpose of this section, the term "qualified dependent" means any individual:
(A) Who is a dependent (as defined in section 152 of the Internal Revenue Code) of the taxpayer;
(B) Who is a child (as defined in section 151(c)(3) of the Internal Revenue Code) of the taxpayer; and
(C) Who has not attained five years of the age at the close of the calendar year in which the taxable year of the taxpayer begins.
This term does not include any dependent of an individual receiving aid or assistance under Part A or Part E of Title IV of the Social Security Act.
(d) For the purposes of this section, the term "qualified dependent spouse" means any individual who is a dependent spouse (as defined in the Internal Revenue Code) of the taxpayer.
(e) No taxpayer may receive any credit amount as defined under subdivision (1) of subsection (b) of this section for a qualified dependent spouse unless the taxpayer also claims a credit for at least one dependent child.
(f) In the case of an individual who is legally married, this section applies only if a joint return is filed for the taxable year.
(g) Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit is allowable under this section in the case of a taxable year covering a period of less than twelve months.
(h)(1) The amount of the credit allowed by this section shall be determined under tables prescribed by the commissioner.
(2) The tables prescribed under paragraph (1) of this subsection shall reflect the provisions of subsections (a) and (b) of this section and shall have income brackets of not greater than one thousand dollars each for earned income between $0 and the amount of earned income at which the credit is phased down to the amount applicable under subsection (b)(3).
(i)(1) In the case of any taxable year beginning after the thirty-first day of December, one thousand nine hundred ninety-four, the ten thousand dollars and the thirty thousand dollars amounts in subsection (b) shall be increased by an amount equal to:
(2) That dollar amount, multiplied by the cost-of-living adjustment determined for the calendar year in which the taxable year begins.
(j) If any increase determined under paragraph (i)(1) is not a multiple of ten dollars, such increase shall be rounded to the nearest multiple of ten dollars.
NOTE: The purpose of this bill is to provide a credit against personal income tax for dependent children.
This section is new; therefore, strike-throughs and underscoring have been omitted.
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