Report Title:

Tax; Earned Income Credit

 

Description:

Authorizes an earned income tax credit.

 

THE SENATE

S.B. NO.

153

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO INCOME TAX CREDITS.

 

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

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Earned income tax credit. (a) Each resident taxpayer, who files an individual net income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for income tax purposes, may claim an earned income tax credit. The tax credit, for the appropriate tax year, shall be equal to:

(1) For taxable years beginning after December 31, 2000, and ending before January 1, 2002, per cent of the federal earned income tax credit determined under section 32 (with respect to earned income) of the Internal Revenue Code and reported as such on the resident individual's federal income tax return for those taxable years; and

(2) For taxable years beginning after December 31, 2001,

per cent of the federal earned income tax credit determined under section 32 (with respect to earned income) of the Internal Revenue Code and reported as such on the resident individual's federal income tax return for those taxable years.

(b) In the case of a part-time resident, the credit shall equal the amount of the credit calculated in subsection (a)(1) or (2) multiplied by the ratio of adjusted gross income attributed to this State to the entire adjusted gross income computed without regard to source in the State pursuant to section 235-5.

(c) For purposes of claiming the credit allowed by this section, a resident individual taxpayer shall use the same filing status (i.e., married filing jointly, head of household, qualifying widow(er), or single) on the taxpayer's Hawaii income tax return as used on the taxpayer's federal return for the same taxable year.

(d) If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1. All claims, including any amended claims, for tax credit under this section shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credit may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(e) The director of taxation shall prepare any forms that may be necessary to claim a tax credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2000.

INTRODUCED BY: