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Introduced Version House Bill 2890 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 2890


(By Delegates Wooton, Hall, Phillips,

Butcher, Walker, Stowers, Ferro and

Fleischauer)

[Introduced March 2, 2009; 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 January 1, 2007, 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 January 1, 2007, 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 $300 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 $300 above the federal poverty guidelines but does not exceed $600 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 $600 above the federal poverty guidelines but does not exceed $900 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 $900 above the federal poverty guidelines but does not exceed $1,200 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 $1,200 above the federal poverty guidelines but does not exceed $1,500 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 $1,500 above the federal poverty guidelines but does not exceed
$1,800 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 $1,800 above the federal poverty guidelines but does not exceed $2,100 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 $2,100 above the federal poverty guidelines but does not exceed $2,400 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 $2,400 above the federal poverty guidelines but does not exceed $2,700 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 $150 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 $150 above fifty percent of the federal poverty guidelines but does not exceed $300 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 $300 above fifty percent of the federal poverty guidelines but does not exceed $450 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 $450 above fifty percent of the federal poverty guidelines but does not exceed $600 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 $600 above fifty percent of the federal poverty guidelines but does not exceed $750 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 $750 above fifty percent of the federal poverty guidelines but does not exceed $900 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 $900 above fifty percent of the federal poverty guidelines but does not exceed $1,050 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 $1,050 above fifty percent of the federal poverty guidelines but does not exceed $1,200 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 $1,200 above fifty percent of the federal poverty guidelines but does not exceed $1,350 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 January 1, 2010:

(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.
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