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 individuals who are
15 experiencing intergenerational poverty;
16 ▸ imposes notification and reporting requirements on the Department of Workforce
17 Services related to individuals who may qualify for the income tax credit;
18 ▸ provides for apportionment of the income tax credit;
19 ▸ addresses the time period for the State Tax Commission to issue a refund of the
20 state earned income tax credit; and
21 ▸ addresses the State Tax Commission's use of the report provided by the Department
22 of Workforce Services.
23 Money Appropriated in this Bill:
25 Other Special Clauses:
26 This bill provides retrospective operation.
27 Utah Code Sections Affected:
29 59-10-529.1, as enacted by Laws of Utah 2015, Chapter 369
31 35A-9-214, Utah Code Annotated 1953
32 59-10-1102.1, Utah Code Annotated 1953
33 59-10-1113, Utah Code Annotated 1953
35 Be it enacted by the Legislature of the state of Utah:
36 Section 1. Section 35A-9-214 is enacted to read:
37 35A-9-214. Income tax credit notification -- Intergenerational poverty report to
38 State Tax Commission.
39 (1) As used in this section:
40 (a) "Commission" means the State Tax Commission.
41 (b) "Experiencing intergenerational poverty" means:
42 (i) the individual received public assistance during the previous calendar year;
43 (ii) the individual received public assistance for 12 months or more since the individual
44 reached 18 years old; and
45 (iii) the individual or the individual's family received public assistance for 12 months
46 or more before the individual reached 18 years old.
47 (2) (a) On or before January 31, the department shall provide a notice to each
48 individual that the department identifies as experiencing intergenerational poverty.
49 (b) The notice described in Subsection (2)(a) shall:
50 (i) inform the individual of the income tax credit available under Section 59-10-1113;
52 (ii) explain the eligibility requirements and process for claiming an income tax credit
53 under Section 59-10-1113.
54 (3) (a) On or before March 1, the department shall provide, in accordance with
55 applicable federal law, the commission with an electronic report.
56 (b) The electronic report shall include the following information for each individual to
57 whom the department provided notice in accordance with this section during the preceding
59 (i) the individual's name; and
60 (ii) the individual's social security number.
61 (c) The department and the commission shall ensure that the information contained in
62 each electronic report is secure and confidential.
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 59-10-1113, the Department of
72 Workforce Services has submitted the electronic report required by Section 35A-9-214; 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 a tax credit
77 described in Section 59-10-1113 may claim only an apportioned amount of the tax credit equal
78 to the product of:
79 (1) the state income tax percentage for the nonresident individual or the state income
80 tax percentage for the 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
84 Section 4. Section 59-10-1113 is enacted to read:
85 59-10-1113. Refundable state earned income tax credit.
86 (1) As used in this section:
87 (a) "Department" means the Department of Workforce Services created in Section
89 (b) "Federal earned income tax credit" means the federal earned income tax credit
90 described in Section 32, Internal Revenue Service.
91 (c) "Qualifying claimant" means a resident individual or a nonresident individual who:
92 (i) is identified by the department as experiencing intergenerational poverty in
93 accordance with Section 35A-9-214; and
94 (ii) claimed a federal earned income tax credit for the previous taxable year.
95 (2) Except as provided in Section 59-10-1102.1, a qualifying claimant may claim a
96 refundable earned income tax credit equal to 10% of the amount of the federal earned income
97 tax credit that the qualifying claimant was entitled to claim on a federal income tax return in
98 the previous taxable year.
99 (3) (a) The commission shall use the electronic report described in Section 35A-9-214
100 to verify that a qualifying claimant is identified as experiencing intergenerational poverty.
101 (b) The commission may not use the electronic report described in Section 35A-9-214
102 for any other purpose.
103 Section 5. Retrospective operation.
104 This bill has retrospective operation for a taxable year beginning on or after January 1,