S.B. 238

1

INDIVIDUAL INCOME TAX - EARNED
2 INCOME TAX CREDIT
3 2004 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Thomas V. Hatch
6
7 LONG TITLE
8 General Description:
9 This bill amends the Individual Income Tax Act.
10 Highlighted Provisions:
11 This bill:
12 . allows certain taxpayers to claim a nonrefundable state earned income tax credit;
13 and
14 . requires the State Tax Commission to make transfers from the General Fund to the
15 Uniform School Fund equal to the amount of state earned income tax credit claimed
16 and grants rulemaking authority to the State Tax Commission to provide procedures
17 for making the transfers.
18 Monies Appropriated in this Bill:
19 None
20 Other Special Clauses:
21 This bill has retrospective operation for taxable years beginning on or after January 1,
22 2004.
23 Utah Code Sections Affected:
24 ENACTS:
25 59-10-136, Utah Code Annotated 1953
26
27 Be it enacted by the Legislature of the state of Utah:

28 Section 1. Section 59-10-136 is enacted to read:
29 59-10-136. Nonrefundable earned income tax credit -- Commission to transfer
30 from the General Fund into the Uniform School Fund an amount equal to the amount of
31 state earned income tax credit claimed -- Rulemaking authority.
32 (1) (a) Subject to Subsection (1)(b), for taxable years beginning on or after January 1,
33 2004, a taxpayer may claim as provided in this section a nonrefundable earned income tax
34 credit equal to 5% of the amount the taxpayer is allowed as a federal earned income tax credit
35 in accordance with Section 32, Internal Revenue Code, for the taxable year.
36 (b) Notwithstanding Subsection (1)(a), a taxpayer may not claim an earned income tax
37 credit under this section if the taxpayer's federal adjusted gross income, as defined in Section
38 62, Internal Revenue Code, is greater than:
39 (i) $12,500 for a taxpayer other than a:
40 (A) husband and wife filing a single return jointly; or
41 (B) head of household; or
42 (ii) $25,000 for a:
43 (A) husband and wife filing a single return jointly; or
44 (B) head of household.
45 (2) A taxpayer may not carry forward or carry back any earned income tax credit
46 allowed under this section.
47 (3) (a) In accordance with any rules prescribed by the commission under Subsection
48 (3)(b), the commission shall transfer at least annually from the General Fund into the Uniform
49 School Fund an amount equal to the amount of earned income tax credit claimed under this
50 section.
51 (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
52 commission may make rules providing procedures for making transfers from the General Fund
53 into the Uniform School Fund as required by Subsection (3)(a).
54 Section 2. Retrospective operation.
55 This bill has retrospective operation for taxable years beginning on or after January 1,
56 2004.

Legislative Review Note
as of 2-3-04 4:43 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel