1     
EARNED INCOME TAX CREDIT AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Marsha Judkins

5     
Senate Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill makes the earned income tax credit refundable.
10     Highlighted Provisions:
11          This bill:
12          ▸     makes the earned income tax credit refundable.
13     Money Appropriated in this Bill:
14          None
15     Other Special Clauses:
16          This bill provides retrospective operation.
17     Utah Code Sections Affected:
18     AMENDS:
19          59-10-1002.2, as last amended by Laws of Utah 2023, Chapters 460, 462
20          59-10-1102.1, as enacted by Laws of Utah 2023, Chapter 460
21     ENACTS:
22          59-10-1115, Utah Code Annotated 1953
23     REPEALS:
24          59-10-1044, as last amended by Laws of Utah 2023, Chapter 459
25     

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 59-10-1002.2 is amended to read:

28          59-10-1002.2. Apportionment of tax credits.
29          (1) A nonresident individual or a part-year resident individual that claims a tax credit
30     in accordance with Section 59-10-1017, 59-10-1018, 59-10-1019, 59-10-1022, 59-10-1023,
31     59-10-1024, 59-10-1028, 59-10-1042, 59-10-1043, [59-10-1044,] 59-10-1046, or 59-10-1047
32     may only claim an apportioned amount of the tax credit equal to:
33          (a) for a nonresident individual, the product of:
34          (i) the state income tax percentage for the nonresident individual; and
35          (ii) the amount of the tax credit that the nonresident individual would have been
36     allowed to claim but for the apportionment requirements of this section; or
37          (b) for a part-year resident individual, the product of:
38          (i) the state income tax percentage for the part-year resident individual; and
39          (ii) the amount of the tax credit that the part-year resident individual would have been
40     allowed to claim but for the apportionment requirements of this section.
41          (2) A nonresident estate or trust that claims a tax credit in accordance with Section
42     59-10-1017, 59-10-1020, 59-10-1022, 59-10-1024, or 59-10-1028 may only claim an
43     apportioned amount of the tax credit equal to the product of:
44          (a) the state income tax percentage for the nonresident estate or trust; and
45          (b) the amount of the tax credit that the nonresident estate or trust would have been
46     allowed to claim but for the apportionment requirements of this section.
47          Section 2. Section 59-10-1102.1 is amended to read:
48          59-10-1102.1. Apportionment of tax credit.
49          A nonresident individual or a part-year resident individual who claims a tax credit in
50     accordance with Section 59-10-1114 or 59-10-1115 may claim only an apportioned amount of
51     the tax credit equal to the product of:
52          (1) the state income tax percentage for the nonresident individual or the state income
53     tax percentage for the part-year resident individual; and
54          (2) the amount of the tax credit that the nonresident individual or the part-year resident
55     individual would have been allowed to claim but for the apportionment requirement of this
56     section.
57          Section 3. Section 59-10-1115 is enacted to read:
58          59-10-1115. Refundable earned income tax credit.

59          (1) As used in this section:
60          (a) "Federal earned income tax credit" means the federal earned income tax credit
61     described in Section 32, Internal Revenue Code.
62          (b) "Qualifying claimant" means a claimant who:
63          (i) qualifies for and claims the federal earned income tax credit for the current taxable
64     year; and
65          (ii) earns income in Utah that is reported on a W-2 form.
66          (2) Subject to Section 59-10-1102.1, a qualifying claimant may claim a refundable
67     earned income tax credit equal to the lesser of:
68          (a) 20% of the amount of the federal earned income tax credit that the qualifying
69     claimant was entitled to claim on a federal income tax return for the current taxable year; and
70          (b) the total Utah wages reported on the qualifying claimant's W-2 form for the current
71     taxable year.
72          Section 4. Repealer.
73          This bill repeals:
74          Section 59-10-1044, Nonrefundable earned income tax credit.
75          Section 5. Effective date.
76          This bill takes effect on May 1, 2024.
77          Section 6. Retrospective operation.
78          This bill has retrospective operation for a taxable year beginning on or after January 1,
79     2024.