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S.B. 82
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INDIVIDUAL INCOME TAX - EARNED
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INCOME TAX CREDIT
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2005 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Thomas V. Hatch
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LONG TITLE
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General Description:
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This bill amends the Individual Income Tax Act to provide for a state earned income
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tax credit.
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Highlighted Provisions:
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This bill:
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. allows certain taxpayers to claim a nonrefundable state earned income tax credit;
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. requires the Division of Finance to make transfers from the General Fund to the
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Uniform School Fund equal to the amount of state earned income tax credit
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claimed; and
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. grants rulemaking authority to the State Tax Commission to provide procedures for
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reporting the amount of state earned income tax credit claimed to the Division of
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Finance.
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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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This bill has retrospective operation for taxable years beginning on or after January 1,
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2005.
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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. Nonrefundable earned income tax credit -- Division of Finance to
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transfer from the General Fund into the Uniform School Fund an amount equal to the
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amount of state earned income tax credit claimed -- Commission rulemaking authority.
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(1) (a) Except as provided in Subsection (1)(b), for taxable years beginning on or after
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January 1, 2005, a taxpayer may claim as provided in this section a nonrefundable earned
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income tax credit equal to 5% of the amount the taxpayer is allowed as a federal earned income
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tax credit in accordance with Section 32, Internal Revenue Code, for the taxable year.
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(b) Notwithstanding Subsection (1)(a), a taxpayer may not claim an earned income tax
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credit under this section if the taxpayer's federal adjusted gross income, as defined in Section
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62, Internal Revenue Code, is greater than:
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(i) $12,500 for a taxpayer other than a:
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(A) husband and wife filing a single return jointly; or
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(B) head of household; or
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(ii) $25,000 for a:
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(A) husband and wife filing a single return jointly; or
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(B) head of household.
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(2) A taxpayer may not carry forward or carry back any earned income tax credit
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allowed under this section.
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(3) (a) Subject to Subsection (3)(b), the Division of Finance shall transfer at least
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annually from the General Fund into the Uniform School Fund an amount equal to the amount
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of earned income tax credit claimed under this section.
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(b) (i) The commission shall report to the Division of Finance the amount of earned
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income tax credit claimed under this section.
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(ii) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
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the commission may make rules providing procedures for reporting to the Division of Finance
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the amount of earned income tax credit claimed under this section.
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Section 2. Retrospective operation.
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This bill has retrospective operation for taxable years beginning on or after January 1,
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2005.
Legislative Review Note
as of 12-7-04 8:44 AM
Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.