S.B. 211

1

EARNED INCOME TAX CREDIT AND RELATED FUNDING
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Benjamin M. McAdams
5 House Sponsor: ____________
6
7 LONG TITLE
8 General Description:
9 This bill enacts a state earned income tax credit and provides funding for the tax credit
10 by increasing the individual income tax rate.
11 Highlighted Provisions:
12 This bill:
13 . enacts a state earned income tax credit;
14 . provides for apportionment of the tax credit;
15 . funds the tax credit by increasing the individual income tax rate; and
16 . makes technical and conforming changes.
17 Money Appropriated in this Bill:
18 None
19 Other Special Clauses:
20 This bill has retrospective operation for a taxable year beginning on or after January 1,
21 2012.
22 Utah Code Sections Affected:
23 AMENDS:
24 59-10-104, as last amended by Laws of Utah 2008, Chapter 389
25 ENACTS:
26 59-10-1102.1, Utah Code Annotated 1953
27 59-10-1110, Utah Code Annotated 1953

28
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 59-10-104 is amended to read:
31 59-10-104. Tax basis -- Tax rate -- Exemption.
32 (1) For taxable years beginning on or after January 1, 2008, a tax is imposed on the
33 state taxable income of a resident individual as provided in this section.
34 (2) For purposes of Subsection (1), for a taxable year, the tax is an amount equal to the
35 product of:
36 (a) the resident individual's state taxable income for that taxable year; and
37 (b) [5%] 5.04%.
38 (3) This section does not apply to a resident individual exempt from taxation under
39 Section 59-10-104.1 .
40 Section 2. Section 59-10-1102.1 is enacted to read:
41 59-10-1102.1. Apportionment of tax credit.
42 A nonresident individual or a part-year resident individual that claims a tax credit in
43 accordance with Section 59-10-1110 may only claim an apportioned amount of the tax credit
44 equal to the product of:
45 (1) the state income tax percentage for the nonresident individual or part-year resident
46 individual; and
47 (2) the amount of the tax credit that the nonresident individual or part-year resident
48 individual would have been allowed to claim but for the apportionment requirements of this
49 section.
50 Section 3. Section 59-10-1110 is enacted to read:
51 59-10-1110. State earned income tax credit.
52 (1) As used in this section, "federal earned income tax credit" means the amount of the
53 federal earned income tax credit a claimant claims as allowed for a taxable year in accordance
54 with Section 32, Internal Revenue Code, on the claimant's federal individual income tax return.
55 (2) Except as provided in Section 59-10-1102.1 and subject to Subsection (3), a
56 claimant may claim a refundable earned income tax credit equal to 5% of the federal earned
57 income tax credit.
58 (3) A claimant may not carry forward or carry back a tax credit provided for under this

59 section.
60 (4) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
61 commission may make rules providing procedures for issuing refunds for a tax credit claimed
62 under this section.
63 Section 4. Retrospective operation.
64 This bill has retrospective operation for a taxable year beginning on or after January 1,
65 2012.




Legislative Review Note
as of 2-15-12 12:15 PM

Office of Legislative Research and General Counsel