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8 LONG TITLE
9 General Description:
10 This bill enacts a state earned income tax credit.
11 Highlighted Provisions:
12 This bill:
13 ▸ defines terms;
14 ▸ enacts a refundable state earned income tax credit for an individual who is
15 experiencing intergenerational poverty or moving out of intergenerational poverty;
16 ▸ requires the Department of Workforce Services to notify individuals who are
17 eligible for the state earned income tax credit and to provide certain information
18 about those individuals to the State Tax Commission;
19 ▸ provides for apportionment of the tax credit;
20 ▸ addresses the time period for the State Tax Commission to issue a refund of the
21 state earned income tax credit; and
22 ▸ requires transfers from the General Fund to reimburse the Education Fund for the
23 amount of the tax credit claimed.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 This bill provides a special effective date.
28 Utah Code Sections Affected:
29 AMENDS:
30 59-10-529.1, as enacted by Laws of Utah 2015, Chapter 369
31 ENACTS:
32 35A-9-202, Utah Code Annotated 1953
33 59-10-1102.1, Utah Code Annotated 1953
34 59-10-1112, Utah Code Annotated 1953
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36 Be it enacted by the Legislature of the state of Utah:
37 Section 1. Section 35A-9-202 is enacted to read:
38 35A-9-202. Tax credit notification -- Intergenerational poverty report to tax
39 commission.
40 (1) As used in this section:
41 (a) "Commission" means the State Tax Commission.
42 (b) "Moving out of intergenerational poverty" means a situation where an individual
43 was identified by the department as experiencing intergenerational poverty in the year before
44 the previous calendar year, but the individual did not receive public assistance during the
45 previous calendar year.
46 (2) (a) On or before January 31, the department shall notify the following individuals
47 of the tax credit available under Section 59-10-1112:
48 (i) an individual identified by the department as experiencing intergenerational poverty
49 due to:
50 (A) the individual's receipt of public assistance for not less than 12 months during the
51 previous five years; and
52 (B) the individual's or the individual's family's receipt of public assistance for not less
53 than 12 months during the individual's childhood; and
54 (ii) an individual identified by the department as moving out of intergenerational
55 poverty.
56 (b) The notice described in Subsection (2)(a) shall explain the eligibility requirements
57 for and the method for claiming a tax credit under Section 59-10-1112.
58 (3) On or before March 1, the department shall provide the commission with an
59 electronic report stating, for each individual to whom the department sent the notice described
60 in Subsection (2):
61 (a) the name of the individual; and
62 (b) the social security number of the individual.
63 Section 2. Section 59-10-529.1 is amended to read:
64 59-10-529.1. Time period for commission to issue a refund.
65 (1) Except as provided in Subsection (2), the commission may not issue a refund
66 before March 1.
67 (2) The commission may issue a refund before March 1 if, before March 1, the
68 commission determines that:
69 (a) (i) an employer has filed the one or more forms in accordance with Subsection
70 59-10-406(8) the employer is required to file with respect to an individual; and
71 (ii) for a refund of a tax credit described in Section 59-10-1112, the Department of
72 Workforce Services has submitted the electronic report required by Section 59-10-1112; and
73 (b) the individual has filed a return in accordance with this chapter.
74 Section 3. Section 59-10-1102.1 is enacted to read:
75 59-10-1102.1. Apportionment of tax credit.
76 A nonresident individual or a part-year resident individual who claims the tax credit
77 described in Section 59-10-1112 may only claim an apportioned amount of the tax credit equal
78 to the product of:
79 (1) the state income tax percentage for a nonresident individual or the state income tax
80 percentage for a part-year resident individual; and
81 (2) the amount of the tax credit that the nonresident individual or the part-year resident
82 individual would have been allowed to claim but for the apportionment requirement of this
83 section.
84 Section 4. Section 59-10-1112 is enacted to read:
85 59-10-1112. Refundable state earned income tax credit -- Definition -- Tax credit
86 calculation -- Transfers from General Fund.
87 (1) As used in this section:
88 (a) "Claimant" means a resident or nonresident individual who:
89 (i) is identified by the department as experiencing intergenerational poverty or moving
90 out of intergenerational poverty; and
91 (ii) claimed the federal earned income tax credit for the previous taxable year.
92 (b) "Department" means the Department of Workforce Services created in Section
93 35A-1-103.
94 (c) "Federal earned income tax credit" means the federal earned income tax credit
95 described in Section 32, Internal Revenue Code.
96 (d) "Intergenerational poverty" means the same as that term is defined in Section
97 35A-9-102.
98 (e) "Moving out of intergenerational poverty" means the same as that term is defined in
99 Section 35A-9-202.
100 (2) Except as provided in Section 59-10-1102.1, a claimant may claim a refundable
101 earned income tax credit equal to 10% of the federal earned income tax credit that the claimant
102 claimed on a federal income tax return in the previous taxable year.
103 (3) (a) The Division of Finance shall transfer at least annually from the General Fund
104 into the Education Fund an amount equal to the amount of tax credit claimed under this
105 section.
106 (b) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
107 commission may make rules for making the transfer described in Subsection (3)(a).
108 Section 5. Effective date.
109 This bill takes effect for a taxable year beginning on or after January 1, 2018.
Legislative Review Note
Office of Legislative Research and General Counsel