REPORT TITLE:
Tax; Earned Income Credit


DESCRIPTION:
Authorizes an earned income tax credit.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2058
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   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 taxpayer, who files an individual net income tax return for a
 
 6 taxable year, and who is not claimed or is not otherwise eligible
 
 7 to be claimed as a dependent by another taxpayer for income tax
 
 8 purposes, may claim an earned income tax credit.  The tax credit,
 
 9 for the appropriate taxable year, shall be equal to:
 
10      (1)  For taxable years beginning after December 3, 1999, and
 
11           ending before January 1, 2001, ten per cent of the
 
12           federal earned income tax credit determined under
 
13           section 32 (with respect to earned income) of the
 
14           Internal Revenue Code and reported as such on the
 
15           resident individual's federal income tax return for
 
16           those 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 (with respect to
 
20           earned income) of the Internal Revenue Code and
 

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

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