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Introduced Version House Bill 205 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 205


(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced November 9, 2006; referred to the
Committee on Finance.]



A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto four new sections, designated §11-21-22, §11-21-22a, §11-21-22b and §11-21-22c, all relating to personal income tax; enacting a low-income family tax credit, defining terms; providing amount of credit; and providing for administration of credit.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto four new sections, designated §11-21-22, §11-21-22a, §11-21-22b and §11-21-22c, all to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§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 enacted a non-refundable tax credit, the low income family tax credit, against the West Virginia personal income tax. The low income family tax credit will be 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.
§11-21-22a. Definitions.
When used in this section and sections twenty-two, twenty-two-b and twenty-two-c of this article, the following terms shall have the meaning ascribed herein, unless a different meaning is clearly provided by the context in which the term is used.
(a) "Federal poverty guidelines" means the U.S. Department of Health and Human Services poverty guidelines updated periodically in the Federal Register under the authority of 42 U.S.C. §9902(c) and available each year on the thirtieth day of June.
(b) "Family size" means the total number of exemptions that may be legally claimed on the West Virginia resident personal income tax return for the taxable year for which the tax credit is claimed: Provided, That family size shall not include the additional exemption that may be claimed by a surviving spouse pursuant to subsection (c), section sixteen of this chapter: Provided, however, That if the total number of exemptions that may be legally claimed on the West Virginia resident personal income tax return for the taxable year for which the tax credit is claimed exceeds eight, the family size shall be deemed eight.
(c) "Indexed tax credit tables" means the two tables annually developed and published by the tax commissioner pursuant to the requirements of section twenty-two-b of this article.
(d) "Modified federal adjusted gross income" means the federal adjusted gross income plus any applicable increasing West Virginia modifications plus any tax exempt interest income reported on the federal tax return.
(e) "Qualified taxpayer" means a taxpayer:
(1) Who files the West Virginia personal income tax return required by this article;
(2) Who files as an individual, as a head of household, as a husband and wife who file a joint return, as an individual entitled to file as a surviving spouse, or as a husband and wife who file separate returns; and
(3) Whose modified federal adjusted gross income does not exceed:
(A) The federal poverty guidelines amount for the family size of the taxpayer plus two thousand seven hundred dollars for those 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; or
(B) Fifty percent of the federal poverty guidelines amount for the family size of the taxpayer plus one thousand three hundred fifty dollars for those taxpayers who are husband and wife and who file separate returns.
(f) "Tax credit" means the low-income family tax credit authorized by this article.
§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 utilized 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 twelve hundred dollars above fifty percent of the federal poverty guidelines but does not exceed thirteen 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) 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 subsection.
§11-21-22c. Administration.
The tax commissioner may promulgate rules in accordance with article three, chapter twenty-nine-a of this code, file administrative notices in the state register in accordance with section three, article two, chapter twenty-nine-a of this code, and develop and publish any instructions, any or all of which as may be determined to be necessary to provide to taxpayers guidance and assistance when claiming this tax credit.


NOTE: The purpose of this bill is to provide a personal income tax credit based on income level and family size.

§§11-21-22, 11-21-22a, 11-21-22b and 11-21-22c are new; therefore, strike-throughs and underscoring have been omitted.
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