REPORT TITLE:
Tax; Earned Income Credit


DESCRIPTION:
Authorizes an earned income tax credit. (HB1830 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1830
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO INCOME TAX CREDITS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "�235-       Earned income tax credit.  (a)  Each resident
 
 5 individual taxpayer, who files an individual net income tax
 
 6 return for a taxable year, and who is not claimed or is not
 
 7 otherwise eligible to be claimed as a dependent by another
 
 8 taxpayer for income tax purposes, may claim an earned income tax
 
 9 credit.  The tax credit shall, for the appropriate taxable year,
 
10 be equal to:
 
11      (1)  For taxable years beginning after December 31, 1999,
 
12           and ending before January 1, 2001, ten per cent of the
 
13           federal earned income tax credit determined under
 
14           section 32 of the Internal Revenue Code and reported as
 
15           such on the resident individual's federal income tax
 
16           return for said taxable years; and
 
17      (2)  For taxable years beginning after December 31, 2000,
 
18           fifteen per cent of the federal earned income tax
 
19           credit determined under section 32 of the Internal
 

 
Page 2                                                     1830
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           Revenue Code and reported as such on the resident
 
 2           individual's federal income tax return for said taxable
 
 3           years.
 
 4      (b)  In the case of a part-year resident, the credit shall
 
 5 equal the amount of the credit calculated in subsection (a)(1)
 
 6 and (2) multiplied by the ratio of adjusted gross income
 
 7 attributed to this State to the entire adjusted gross income
 
 8 computed without regard to source in the State pursuant to
 
 9 section 235-5.
 
10      (c)  For purposes of claiming the credit allowed by this
 
11 section, a resident individual taxpayer must use the same filing
 
12 status (i.e., "married filing jointly," "head of household,"
 
13 "qualifying widow(er)," or "single") on their Hawaii tax return
 
14 as used on the taxpayer's federal return for the taxable year.
 
15      (d)  If the tax credit under this section exceeds the
 
16 taxpayer's income tax liability, the excess of credits over
 
17 liability shall be refunded to the taxpayer; provided that no
 
18 refunds or payment on account of the tax credits allowed by this
 
19 section shall be made for amounts less than $1.  All claims,
 
20 including any amended claims for tax credits under this section
 
21 shall be filed on or before the end of the twelfth month
 
22 following the close of the taxable year for which the credit may
 
23 be claimed.  Failure to comply with the preceding sentence shall
 
24 constitute a waiver of the right to claim the credit.
 

 
Page 3                                                     1830
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (e)  The director of taxation:
 
 2      (1)  Shall prepare such forms as may be necessary to claim a
 
 3           tax credit under this section;
 
 4      (2)  May require proof of the claim for the tax credit; and
 
 5      (3)  May adopt rules pursuant to chapter 91."
 
 6      SECTION 2.  New statutory material is underscored.
 
 7      SECTION 3.  This Act, upon its approval, shall apply to
 
 8 taxable years beginning after December 31, 1999.