Senate Bill No. 2010
(By Senators Tomblin, Mr. President, and Sprouse,
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.