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18102327D
HOUSE BILL NO. 716
Offered January 10, 2018
Prefiled January 9, 2018
A BILL to amend and reenact 58.1-339.8 and 63.2-527 of the Code of Virginia, relating to refundable income tax credit for low-income taxpayers.
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Patrons-- Plum, Boysko, Convirs-Fowler, Gooditis, Hope, Krizek, Rasoul, Simon and Tyler
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Referred to Committee on Finance
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Be it enacted by the General Assembly of Virginia:

1. That 58.1-339.8 and 63.2-527 of the Code of Virginia are amended and reenacted as follows:

58.1-339.8. Income tax credit for low-income taxpayers.

A. As used in this section, unless the context requires otherwise:

"Family Virginia adjusted gross income" means the combined Virginia adjusted gross income of an individual, the individual's spouse, and any person claimed as a dependent on the individual's or his spouse's income tax return for the taxable year.

"Household" means an individual and, in the case of married persons, the individual and his spouse regardless of whether or not the individual and his spouse file combined or separate Virginia individual income tax returns.

"Poverty guidelines" means the poverty guidelines for the 48 contiguous states and the District of Columbia updated annually in the Federal Register by the U.S. Department of Health and Human Services under the authority of 673(2) of the Omnibus Budget Reconciliation Act of 1981.

"Virginia adjusted gross income" has the same meaning as the term is defined in 58.1-321.

B. 1. For taxable years beginning on and after January 1, 2000, any individual or persons filing a joint return whose family Virginia adjusted gross income does not exceed 100 percent of the poverty guideline amount corresponding to a household of an equal number of persons as listed in the poverty guidelines published during such taxable year, shall be allowed a nonrefundable credit against the tax levied pursuant to 58.1-320 in an amount equal to $300 each for the individual, the individual's spouse, and any person claimed as a dependent on the individual's or married persons' income tax return for the taxable year. For any taxable year in which a husband and wife file separate Virginia income tax returns, the credit provided under this section shall be allowed against the tax for only one of such two tax returns. Additionally, the credit provided under this section shall not be allowed against such tax of a dependent of the individual or of married persons.

2. For taxable years beginning on and after January 1, 2006, any individual or married persons, eligible for a tax credit pursuant to 32 of the Internal Revenue Code, may for the taxable year, in lieu of the credit authorized under subdivision B 1, claim a nonrefundable credit against the tax imposed pursuant to 58.1-320 in an amount equal to 20 percent of the credit claimed by the individual or married persons for federal individual income taxes pursuant to 32 of the Internal Revenue Code for the taxable year. In no case shall a household be allowed a credit pursuant to this subdivision and subdivision B 1 or 3 for the same taxable year.

3. For taxable years beginning on and after January 1, 2018, any individual or married persons, eligible for a tax credit pursuant to 32 of the Internal Revenue Code, may for the taxable year, in lieu of the credit authorized under subdivision 1 or 2, claim a refundable credit against the tax imposed pursuant to 58.1-320 in an amount equal to 20 percent of the credit claimed by the individual or married persons for federal individual income taxes pursuant to 32 of the Internal Revenue Code for the taxable year. The refundable credit shall be claimed on the Virginia income tax return and redeemed by the Tax Commissioner. In no case shall a household be allowed a credit pursuant to this subdivision and subdivision 1 or 2 for the same taxable year.

For purpose of this subdivision, "household" means an individual and in the case of married persons, the individual and his spouse regardless of whether or not the individual and his spouse file combined or separate Virginia individual income tax returns.

C. The amount of the credit provided pursuant to subsection subdivision B 1 or 2 for any taxable year shall not exceed the individual's or married persons' Virginia income tax liability.

D. Notwithstanding any other provision of this section, no credit shall be allowed pursuant to subsection B in any taxable year in which the individual, the individual's spouse, or both, or any person claimed as a dependent on such individual's or married persons' income tax return, claims one or any combination of the following on his or their income tax return for such taxable year:

1. The subtraction under subdivision 8 of 58.1-322.02;

2. The subtraction under subdivision 15 of 58.1-322.02;

3. The subtraction under subdivision 16 of 58.1-322.02;

4. The deduction for the additional personal exemption for blind or aged taxpayers under subdivision 2 b of 58.1-322.03; or

5. The deduction under subdivision 5 of 58.1-322.03.

63.2-527. Notice of earned income tax credit.

The Department shall provide notice regarding the availability of the federal earned income tax credit authorized in 32 of the Internal Revenue Code and the state earned income tax credit income tax credit for low-income taxpayers authorized in subdivision B 2 of 58.1-339.8 to all recipients of Temporary Assistance for Needy Families pursuant to Chapter 6 ( 63.2-600 et seq.), food stamps pursuant to 63.2-801, or medical assistance pursuant to 32.1-325 who had earned income in the prior tax year based on information available through the Virginia Employment Commission and, according to information made available by the Virginia Department of Taxation, either did not file federal or state income taxes or filed taxes and did not claim the federal or state earned income tax credit. Notice shall be distributed to recipients annually and shall include information on the qualifying income levels, the amount of credit available, the process for applying for the credit, and the availability of assistance in applying for the credit.

2. That the provisions of this act shall become effective for taxable years beginning on and after January 1, 2018.


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