Senate Bill No. 239
(By Senators Harrison, McCabe, Hunter and Oliverio)
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[Introduced January 23, 2006; referred to the Committee
on Finance.]
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A BILL to amend and reenact §11-21-10 of the Code of West
Virginia, 1931, as amended, relating to personal income tax;
and changing the low-income exclusion.
Be it enacted by the Legislature of West Virginia:
That section §11-21-10 of the Code of West Virginia, 1931,
as amended, be amended and reenacted to read as follows:
ARTICLE 21.
PERSONAL INCOME TAX.
§11-21-10. Low-income exclusion.
(a) Earned income exclusion. -- In the case of an eligible
taxpayer, there shall be is allowed as a deduction from federal
adjusted gross income the amount of his or her earned income
included therein, not to exceed ten thousand dollars, except that
when a husband and wife file separate returns under this article
this exclusion shall not exceed five thousand dollars per
separate return: Provided, That for the taxable year beginning the first day of January, one thousand nine hundred ninety-six
the exclusion provided for in this section shall apply only to
earned income received after the thirtieth day of June, one
thousand nine hundred ninety-six and the amount excluded shall
not exceed fifty percent of the annual low income exclusion
amounts set forth in this subsection
ten thousand dollars for
forms with one exemption claimed; thirteen thousand dollars for
forms with two exemptions claimed; sixteen thousand dollars for
forms with three exemptions claimed; nineteen thousand dollars
for forms with four exemptions claimed; twenty-three thousand
dollars for forms with five exemptions claimed; twenty-six
thousand dollars for forms with six exemptions claimed; twenty-
nine thousand dollars for forms with seven exemptions claimed; or
thirty-two thousand dollars for forms with eight or more
exemptions claimed.
(b) "Eligible taxpayer" defined. -- The term "eligible
taxpayer" means:
(1) Any unmarried individual and any husband and wife filing
a joint return under this article who has or have federal
adjusted gross income of ten thousand dollars or less for the
taxable year; or forms with one exemption claimed; more than ten
thousand dollars and thirteen thousand dollars or less for forms
with two exemptions claimed; more than thirteen thousand dollars
and sixteen thousand dollars or less for forms with three exemptions claimed; more than sixteen thousand dollars and
nineteen thousand dollars or less for forms with four exemptions
claimed; more than nineteen thousand dollars and twenty-three
thousand dollars or less for forms with five exemptions claimed;
more than twenty-three thousand dollars and twenty-six thousand
dollars or less for forms with six exemptions claimed; more than
twenty-six thousand dollars and twenty-nine thousand dollars or
less for forms with seven exemptions claimed; or more than
twenty-nine thousand dollars and thirty-two thousand dollars or
less for forms with eight or more exemptions claimed.
(2) Any husband or wife filing a separate return under this
article who has federal adjusted gross income of five thousand
dollars or less for forms with one exemption claimed; more than
five thousand dollars and six thousand five hundred dollars or
less for forms with two exemptions claimed; more than six
thousand five hundred dollars and eight thousand dollars or less
for forms with three exemptions claimed; more than eight thousand
dollars and nine thousand five hundred dollars or less for forms
with four exemptions claimed; more than nine thousand five
hundred dollars and eleven thousand five hundred dollars or less
for forms with five exemptions claimed; more than eleven thousand
five hundred dollars and thirteen thousand dollars or less for
forms with six exemptions claimed; more than thirteen thousand
dollars and fourteen thousand five hundred dollars or less for forms with seven exemptions claimed; or more than fourteen
thousand five hundred dollars and sixteen thousand dollars or
less for forms with eight or more exemptions claimed.
(c) "Earned income" defined. --
(1) The term "earned income" means:
(A) Wages, salaries, tips and other employee compensation;
plus
(B) The amount of the taxpayer's net earnings from
self-employment for the taxable year (within the meaning of
section 1402 (a) of the Internal Revenue Code), but such net
earnings shall be determined with regard to the deduction allowed
to the taxpayer under section 164 of the Internal Revenue Code.
(2) For purposes of this section:
(A) The earned income of an individual shall be computed
without regard to any community property laws;
(B) No amount received as pension or annuity shall be taken
into account; and
(C) No amount received for services provided by an
individual while the individual is an inmate at a penal
institution shall be taken into account.
(d) Taxable year must be full taxable year. -- Except in the
case of a taxable year closed by reason of the death of the
taxpayer, no credit shall be allowed under this section in the case of a taxable year covering a period of less than twelve
months.
NOTE: The purpose of this bill is to change the personal
low income tax exclusion.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.