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H.B. 345
This document includes House Committee Amendments incorporated into the bill on Fri,
Feb 20, 2004 at 12:14 PM by chopkin. -->
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EARNED INCOME TAX CREDIT
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2004 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Jackie Biskupski
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LONG TITLE
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General Description:
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This bill amends the Individual Income Tax Act.
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Highlighted Provisions:
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This bill:
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. provides for a refundable state earned income tax credit that is a certain percentage
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of the federal earned income tax credit;
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. requires the State Tax Commission to increase or decrease for inflation or deflation
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federal adjusted gross income amounts used in determining the tax credit; and
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. grants rulemaking authority to the State Tax Commission to provide procedures for
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issuing refunds under certain circumstances to a resident or nonresident individual
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claiming the tax credit.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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None
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Utah Code Sections Affected:
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ENACTS:
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59-10-136, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
59-10-136
is enacted to read:
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59-10-136. H
DEFINITIONS --
h State earned income tax credit.
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(1) As used in this section:
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(a) "federal adjusted gross income" is as defined in Section 62, Internal Revenue Code;
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H [
and
] h
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(b) "federal earned income tax credit" means the amount of the federal earned income
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tax credit an individual is allowed for the taxable year in accordance with Section 32, Internal
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Revenue Code H [
.
]
; AND
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(c) NOTWITHSTANDING SECTION 59-10-103, "NONRESIDENT INDIVIDUAL" MEANS AN
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INDIVIDUAL WHO:
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(i) IS NOT A RESIDENT OF THIS STATE; AND
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(ii) HAS FEDERAL ADJUSTED GROSS INCOME DERIVED FROM UTAH SOURCES AS
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CALCULATED UNDER SECTION 59-10-117.
h
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(2) H [
For
]
SUBJECT TO SUBSECTION (4), FOR
h taxable years beginning on or after
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January 1, 2005, a resident or nonresident
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individual may claim as provided in this section a refundable earned income tax credit as
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follows:
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(a) the tax credit is equal to 10% of the federal earned income tax credit if:
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(i) the federal adjusted gross income of the following is less than or equal to $5,000:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household; or
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(ii) the federal adjusted gross income of a resident or nonresident individual other than
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the following is less than or equal to $2,500:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household;
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(b) the tax credit is equal to 7% of the federal earned income tax credit if:
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(i) the federal adjusted gross income of the following is greater than $5,000 but less
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than or equal to $15,000:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household; or
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(ii) the federal adjusted gross income of a resident or nonresident individual other than
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the following is greater than $2,500 but less than or equal to $7,500:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household; or
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(c) the tax credit is equal to 4% of the federal earned income tax credit if:
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(i) the federal adjusted gross income of the following is greater than $15,000 but less
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than or equal to $25,000:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household; or
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(ii) the federal adjusted gross income of a resident or nonresident individual other than
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the following is greater than $7,500 but less than or equal to $12,500:
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(A) a husband and wife filing a single tax return jointly; or
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(B) a head of household.
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(3) (a) For taxable years beginning on or after January 1, 2006, the commission shall
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increase or decrease the federal adjusted gross income amounts provided for in Subsection (2)
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by a percentage equal to the percentage difference between the consumer price index for the
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preceding calendar year and the consumer price index for calendar year 2004.
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(b) For purposes of Subsection (3)(a), the commission shall calculate the consumer
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price index as provided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
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H
(4) THE TAX CREDIT FOR A NONRESIDENT INDIVIDUAL IS LIMITED TO AN AMOUNT
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EQUAL TO THE PRODUCT OF:
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(a) THE TAX CREDIT CALCULATED UNDER SUBSECTION (2); AND
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(b) A PERCENTAGE CALCULATED BY DIVIDING THE NONRESIDENT INDIVIDUAL'S
FEDERAL
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ADJUSTED GROSS INCOME DERIVED FROM UTAH SOURCES FOR THE TAXABLE YEAR, AS
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CALCULATED UNDER SECTION 59-10-117, BY THE NONRESIDENT INDIVIDUAL'S TOTAL FEDERAL
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ADJUSTED GROSS INCOME FOR THAT SAME TAXABLE YEAR.
h
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H [
(4)
]
(5)
h A resident or nonresident individual may not claim a tax credit under this
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section if
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the resident or nonresident individual's federal adjusted gross income is greater than the
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greatest amount of federal adjusted gross income for which a tax credit is allowed under
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Subsection (2)(c).
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H [
(5)
]
(6)
h A resident or nonresident individual may not carry forward or carry back the tax
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credit provided for under this section.
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H [
(6)
]
(7)
h In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
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the
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commission may make rules providing procedures for issuing a refund to a resident or
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nonresident individual for the tax credit provided for under this section if the tax credit exceeds
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the resident or nonresident individual's tax liability under this chapter for the taxable year for
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which the resident or nonresident individual claims the tax credit.
Legislative Review Note
as of 2-5-04 6:26 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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