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2000 SESSION

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002814518
SENATE BILL NO. 492 Offered January 24, 2000 A BILL to amend the Code of Virginia by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.8, relating to the earned income tax credit. ----------
Patrons-- Puller, Barry, Colgan, Howell, Lambert, Marye, Miller, Y.B., Quayle and Whipple; Delegates: Almand, Amundson, Callahan, Darner, Hall, Moran, Phillips, Plum, Thomas, Van Landingham and Van Yahres
---------- Referred to Committee on Finance ----------

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.8 as follows:

§ 58.1-339.8. Earned-income tax credit.

For taxable years beginning on and after January 1, 2000, any individual whose Virginia earned income does not exceed $19,000 shall be allowed a credit for earned income against the tax levied pursuant to § 58.1-320. Any individual whose credit exceeds his tax liability shall receive a refund equal to the amount the credit exceeds the tax liability. The allowable credit amount shall be equal to a percentage of the federal earned-income credit allowed the individual for the taxable year under § 32 (a) (1) of the Internal Revenue Code, using the percentages under § 32 (b) with the limitation contained in § 32 (a) (2), as follows:

1. Individuals with Virginia earned income of $11,000 or less shall be allowed a credit equal to ten percent of the federal earned-income credit;

2. Individuals with Virginia earned income in excess of $11,000 but not in excess of $12,000 shall be allowed a credit equal to nine percent of the federal earned-income credit;

3. Individuals with Virginia earned income in excess of $12,000 but not in excess of $13,000 shall be allowed a credit equal to eight percent of the federal earned-income credit;

4. Individuals with Virginia earned income in excess of $13,000 but not in excess of $14,000 shall be allowed a credit equal to seven percent of the federal earned-income credit;

5. Individuals with Virginia earned income in excess of $14,000 but not in excess of $15,000 shall be allowed a credit equal to six percent of the federal earned-income credit;

6. Individuals with Virginia earned income in excess of $15,000 but not in excess of $16,000 shall be allowed a credit equal to five percent of the federal earned-income credit;

7. Individuals with Virginia earned income in excess of $16,000 but not in excess of $17,000 shall be allowed a credit equal to four percent of the federal earned-income credit;

8. Individuals with Virginia earned income in excess of $17,000 but not in excess of $18,000 shall be allowed a credit equal to three percent of the federal earned-income credit; and

9. Individuals with Virginia earned income in excess of $18,000 but not in excess of $19,000 shall be allowed a credit equal to two percent of the federal earned-income credit.

In the case of a nonresident taxpayer, the amount of the credit allowed under this section shall not exceed the nonresident’s Virginia tax liability. In the case of a part-year resident taxpayer whose credit exceeds his tax liability, any refund amount shall be limited to the amount of the excess multiplied by a fraction, the numerator of which is federal adjusted gross income for the period of Virginia residence, and the denominator of which is federal adjusted gross income for the entire taxable year.