Section 5213-A - Sales tax fairness creditFor tax years beginning on or after January 1, 2016, individuals are allowed a credit as computed under this section against the taxes imposed under this Part. [2015, c. 267, Pt. DD, §19(NEW).]
1.Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.A. For tax years beginning before January 1, 2018, "base credit" means: (1) For an individual income tax return claiming one personal exemption, $100 for tax years beginning in 2016 and $125 for tax years beginning on or after January 1, 2017;(2) For an individual income tax return claiming 2 personal exemptions, $140 for tax years beginning in 2016 and $175 for tax years beginning on or after January 1, 2017;(3) For an individual income tax return claiming 3 personal exemptions, $160 for tax years beginning in 2016 and $200 for tax years beginning on or after January 1, 2017; and(4) For an individual income tax return claiming 4 or more personal exemptions, $180 for tax years beginning in 2016 and $225 for tax years beginning on or after January 1, 2017. For the purposes of this paragraph, personal exemption does not include a personal exemption for an individual who is incarcerated. [2017, c. 474, Pt. B, §8(AMD).]
A-1. For tax years beginning on or after January 1, 2018, "base credit" means:(1) For single individuals, $125;(2) For individuals filing joint returns or as heads of households, $175 plus an additional amount equal to:(a) For individuals filing joint returns, $25 if they can claim the federal child tax credit pursuant to the Code, Section 24 for no more than one qualifying child or dependent or $50 if they can claim the credit for more than one qualifying child or dependent; or(b) For individuals filing as heads of households, $25 if they can claim the federal child tax credit pursuant to the Code, Section 24 for 2 qualifying children or dependents or $50 if they can claim the credit for more than 2 qualifying children or dependents. [2017, c. 474, Pt. B, §9(NEW).]B. "Income" means federal adjusted gross income increased by the following amounts: (1) Trade or business losses; capital losses; any net loss resulting from combining the income or loss from rental real estate and royalties, the income or loss from partnerships and S corporations, the income or loss from estates and trusts, the income or loss from real estate mortgage investment conduits and the net farm rental income or loss; any loss associated with the sale of business property; and farm losses included in federal adjusted gross income;(2) Interest received to the extent not included in federal adjusted gross income;(3) Payments received under the federal Social Security Act and railroad retirement benefits to the extent not included in federal adjusted gross income; and(4) The following amounts deducted in arriving at federal adjusted gross income:(a) Educator expenses pursuant to the Code, Section 62(a)(2)(D);(b) Certain business expenses of performing artists pursuant to the Code, Section 62(a)(2)(B);(c) Certain business expenses of government officials pursuant to the Code, Section 62(a)(2)(C);(d) Certain business expenses of reservists pursuant to the Code, Section 62(a)(2)(E);(e) Health savings account deductions pursuant to the Code, Section 62(a)(16) and Section 62(a)(19);(f) Moving expenses pursuant to the Code, Section 62(a)(15);(g) The deductible part of self-employment tax pursuant to the Code, Section 164(f);(h) The deduction for self-employed SEP, SIMPLE and qualified plans pursuant to the Code, Section 62(a)(6);(i) The self-employed health insurance deduction pursuant to the Code, Section 162(l);(j) The penalty for early withdrawal of savings pursuant to the Code, Section 62(a)(9);(k) Alimony paid pursuant to the Code, Section 62(a)(10);(l) The IRA deduction pursuant to the Code, Section 62(a)(7);(m) The student loan interest deduction pursuant to the Code, Section 62(a)(17); and(n) The tuition and fees deduction pursuant to the Code, Section 62(a)(18). [2017, c. 474, Pt. B, §10(AMD).] [2017, c. 474, Pt. B, §§8-10(AMD).]
2.Credit for resident taxpayer. A resident individual is allowed a credit equal to the applicable base credit amount, subject to the phase-out provisions under subsection 4. [2015, c. 267, Pt. DD, §19(NEW).]
3.Credit for part-year resident taxpayer. A taxpayer who files a return as a part-year resident in accordance with section 5224-A is allowed a credit equal to the applicable base credit amount, subject to the phase-out provisions under subsection 4, multiplied by a ratio, the numerator of which is the individual's income as modified by section 5122 for that portion of the taxable year during which the individual was a resident plus the individual's income from sources within this State, as determined under section 5142, for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire income, as modified by section 5122. [2015, c. 267, Pt. DD, §19(NEW).]
4.Phase-out of credit. The credit allowed under this section is phased out as follows. A. For single individuals, the credit is reduced by $10 for every $500 or portion thereof that exceeds $20,000 of the income. [2015, c. 267, Pt. DD, §19(NEW).]B. For unmarried individuals or legally separated individuals who qualify as heads of households, the credit is reduced by $15 for every $750 or portion thereof that exceeds $30,000 of the income. [2015, c. 267, Pt. DD, §19(NEW).]C. For individuals filing married joint returns or surviving spouses permitted to file joint returns, the credit is reduced by $20 for every $1,000 or portion thereof that exceeds $40,000 of the income. [2015, c. 267, Pt. DD, §19(NEW).] [2015, c. 267, Pt. DD, §19(NEW).]
5.Refundability of credit. The tax credit allowed under this section is refundable. [2015, c. 267, Pt. DD, §19(NEW).]
6.Limitations. The following individuals do not qualify for the credit under this section: A. Married taxpayers filing separate returns; [2017, c. 474, Pt. B, §11(AMD).]B. Individuals who do not qualify as resident individuals because they do not meet the requirements of section 5102, subsection 5, paragraph A; or [2017, c. 474, Pt. B, §11(AMD).]C. Individuals who may be claimed as a dependent on another taxpayer's return. [2017, c. 474, Pt. B, §11(NEW).] [2017, c. 474, Pt. B, §11(AMD).]
Amended by 2018SP2, c. 474,§ B-11, eff. 9/12/2018.Amended by 2018SP2, c. 474,§ B-10, eff. 9/12/2018.Amended by 2018SP2, c. 474,§ B-9, eff. 9/12/2018.Amended by 2018SP2, c. 474,§ B-8, eff. 9/12/2018.Amended by 2015, c. 328,§ 4, eff. 10/15/2015.Added by 2015, c. 267,§ DD-19, eff. 6/30/2015.