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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
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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, [
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.