Struck = removed from the bill ·
added = the amendment's new text.
SecondHB1311_S_APP.003 RegularNOT SessionAMENDED Seventy-fourthSENATE GeneralCOMMITTEE Assembly STATE OF COLORADOREFERENCE ENGROSSEDREPORT This_______________________________ VersionMay Includes4, All2024 AmendmentsChair Adoptedof onCommittee SecondDate ReadingCommittee inon theAppropriations. House of Introduction LLS NO.
24-0942.01After Carolineconsideration Martinon x5902the HOUSEmerits, BILLthe 24-1311Committee HOUSErecommends SPONSORSHIPthe deGruyKennedyandWillford,following: Garcia,Bacon,Mabrey,Ortiz,Rutinel,Sirota,Weissman SENATE SPONSORSHIP Winter F.
andHB24-1311 Coleman,be Housereferred Committeesto Senatethe CommitteesCommittee Financeof Appropriationsthe AWhole BILLwith FORfavorable ANrecommendation. ACT C ONCERNING THE CREATION OF A FAMILY AFFORDABILITY TAX CREDIT , AND , IN CONNECTION THEREWITH , MAKING AN APPROPRIATION .
Bill** Summary*** (Note:** *** **
This summary applies to this bill as introduced and does notreflectanyamendmentsthatmaybesubsequentlyadopted.Ifthisbill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) For income tax years commencing on and after January 1, 2024, the bill creates a family affordability tax credit (credit) as follows:
! For each of a taxpayer's eligible children 5 years of age or younger, a taxpayer filing a single return with adjusted i 4 a 0 grossincomeof$15,000orlessandtaxpayersfilingajoint S R , O n 3 Shading denotes HOUSE amendment.
Double underlining denotes SENATE amendment.
H 2 r Capital letters or bold & italic numbers indicate new material to be added to existingdlaw.
Dashes through the words or numbers indicate deletions from existing law.
e m A return with adjusted gross income of $25,000 or less can claim a $3,200 credit;
! For each of a taxpayer's eligible children 5 years of age or younger, a taxpayer filing a single return with adjusted gross income between $15,000 and $85,000 and taxpayers filing a joint return with adjusted gross income between $25,000 and $95,000 can claim a credit, the amount of which is reduced by $220 from $3,200 for every $5,000 above$15,000or$25,000ofadjustedgrossincomethatthe resident individual or individuals make;
! For each of a taxpayer's eligible children between the ages of 6 and 16, a taxpayer filing a single return with adjusted gross income of $15,000 or less and taxpayers filing a joint return with adjusted gross income of $25,000 or less can claim $2,400;
and ! For each of a taxpayer's eligible children between the ages of 6 and 16, a taxpayer filing a single return with adjusted gross income between $15,000 and $85,000 and taxpayers filing a joint return with adjusted gross income between $25,000 and $95,000 can claim a credit, the amount of which is reduced by $165 from $2,400 for every $5,000 above$15,000or$25,000ofadjustedgrossincomethatthe resident individual or individuals make.
The bill alsoprovidesthatthefullamountof thecreditcanonlybe claimed for an income tax year in which there are projected to be excess state revenues for the fiscal year that ends duringthe income tax year that arerequiredtoberefundedpursuanttosection20(7)(d)ofarticleXofthe state constitution in an amount that will equal or exceed the amount requiredtoberefundedpursuanttothehomesteadpropertytaxexemption plus the projected full amount of the credit.
For an income tax year in which there are projected to be excess state revenues for the fiscal year thatendsduringthe income tax year that will exceed the amount required to be refunded pursuanttothehomesteadpropertytaxexemption but will not exceed that amount plus the projected aggregate amount of the credit thatmaybeclaimedinthatincometaxyear,thecreditwillbeallowedbut will be reduced proportionally so that the aggregate amount of the credit available is equal to the amount of excess state revenues remaining to be refunded.
For an income tax year in which there is not projected to be excess state revenues for the fiscal year that ends during the income tax year or the amount of such excess state revenues required to be refunded will be less than the amount required to be refunded pursuant to the homestead property tax exemption, the credit is not allowed for that incometaxyear.Thedepartmentofrevenueisauthorizedandencouraged to develop a means of paying the credit in 12 equal monthly payments rather than annually.
-2- 1311 Be it enacted by the General Assembly of the State of Colorado:
SECTION 1.
In Colorado Revised Statutes, add 39-22-130 as follows:
39-22-130.
Family affordability tax credit - legislative declaration - definitions - repeal.
(1) HE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES THAT:
(I) OLORADO FAMILIES STRUGGLE TO AFFORD MANY NECESSARY GOODSANDSERVICES ,SUCHASCHILDCARE ,HOUSING,ANDHEALTHCARE .
EIGHTY THREE PERCENT OF COLORADO PARENTS WORRY THAT THEIR CHILDRENWON TBEABLETOAFFORDTOLIVEINTHESTATEINTHEFUTURE .
(II) ARGETEDTAXCREDITSAREAPROVENTOOLTOLIFTFAMILIES OUT OF POVERTY .
ESEARCH HAS SHOWN THAT FAMILIES THAT CLAIM THESE TYPES OF TAX CREDIT,SUCH AS THE STATE AND FEDERAL CHILD TAX CREDIT AND THE STATE AND FEDERAL EARNED INCOME TAX CREDI, HAVEBETTERHEALTH ,IMPROVEDSCHOOLINGOUTCOMES ANDINCREASED ADULT EARNING POTENTIAL .
AS THE COST OF RAISING CHILDREN HAS INCREASED ,A FAMILY AFFORDABILITY TAX CREDIT IS CRITICAL FOR THE WELL BEING OF MANY CHILDREN AND FAMILIES ACROSSCOLORADO .
(III) CCORDINGTOTHE NSTITUTEON T AXATIONAND E CONOMIC POLICY, "T]O CUT CHILD POVERTY RATES BY HALF,THE MAJORITY OF STATES WOULD REQUIRE A BASE CREDIT VALUE OF BETWEEN THREE THOUSAND DOLLARS AND FOUR THOUSAND FIVE HUNDRED DOLLARS PER CHILD PLUS A TWENTY PERCENT BOOST FOR YOUNG CHILDREN ." WHEN COUPLEDWITHTHESTATEANDFEDERALEARNEDINCOMETAXCREDITAND THESTATEANDFEDERALCHILDTAXCREDIT ,THEADDITIONALINVESTMENT PROVIDEDBYTHEFAMILYAFFORDABILITYTAXCREDITWOULDESTABLISH -3- 1311 C OLORADO AS A NATIONAL LEADER IN EQUITABLE ECONOMIC POLIC.
(IV) C OLORADO IS DEALING WITH RISING COSTS AND FUNDING SHORTFALLSINMANYAREASACROSSOURSTATE ,ANDITISNECESSARYTO PROVIDE TAX CREDITS TO THE PEOPLE WHO NEED IT MOST IN A WAY THAT WILLDOTHEMOSTGOOD .ESTABLISHINGTHEFAMILYAFFORDABILITYTAX CREDIT IS A PROVEN WAY TO DO THA;AND (V) B Y PRIORITIZING THE STAT'S LOWEST-INCOME FAMILIES, EXPANDING THE CHILD AGE ELIGIBILI,AND INCLUDING MORE FAMILIE, THESTATECANPROVIDERESEARCH -BACKEDINVESTMENTSFORFAMILIES .
THROUGH THOUGHTFUL AND STRATEGIC INVESTMENT , OLORADO CAN CUT CHILD POVERTY NEARLY IN HAL.
(b) THE GENERAL ASSEMBLY DECLARES ITS INTENT TO PERIODICALLY REVIEW THE TAX CREDIT CREATED IN THIS SECTION IN AN EFFORTTOPREVENTASIGNIFICANTINCREASEORDECREASE ,ADJUSTEDFOR INFLATION,INTHETOTALAMOUNTOFTHECREDITCLAIMEDBYTAXPAYERS YEAR OVER YEAR STARTING IN INCOME TAX YEAR2025.
(c) NACCORDANCEWITHSECTION 39-21-304(1)WHICHREQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY LEGISLATIVE DECLARATION,THE GENERALASSEMBLYHEREBY FINDS AND DECLARES THAT THE PURPOSES OF THE TAX EXPENDITURE CREATED IN SUBSECTION (3)OF THIS SECTION ARE TO SUBSTANTIALLY REDUCE CHILD POVERTY ,MAKE COLORADO MORE AFFORDABLE FOR FAMILIES AND HELP FAMILIES AFFORD EXPENSES ASSOCIATED WITH HAVING CHILDREN BY PROVIDING TAX RELIEF FOR CERTAIN INDIVIDUA.S (d) THE GENERAL ASSEMBLY AND THE STATE AUDITOR , IN CONSULTATIONWITHTHEDEPARTMENTOFREVENUE ,SHALLMEASURETHE -4- 1311 EFFECTIVENESS OF THE EXEMPTION ALLOWED BY THIS SECTION BY DETERMININGTHENUMBEROF COLORADOFAMILIESWHO ,AFTERCLAIMING A CREDIT OR CREDITS IN THIS SECTIO,NO LONGER FALL BELOW THE FEDERAL POVERTY LEVEL IN THE TAX YEAR IN WHICH THEY CLAIMED THE CREDIT OR CREDIT.
(2) AS USED IN THIS SECTI,UNLESS THE CONTEXT OTHERWISE REQUIRES:
(a) "LIGIBLE CHIL" MEANS A QUALIFYING CHIL,AS DEFINED IN SECTION 152 (c)OF THE"INTERNAL R EVENUE CODE OF 1986";EXCEPT THATTHEAGEREQUIREMENTSAREASSETFORTHINSUBSECTIONS (3)(a)(I), (3)(a)(II), (3)(bAND)(3)(b)(IOF THIS SECTIO.
(b) (I) "STIMATED ADJUSTMENT FACTOR "MEANS ,FOR A GIVEN INCOME TAX YEAR ,THE CAGR FOR NONEXEMPT REVENUE THAT IS CALCULATED ACCORDING TO THE FOLLOWING FORMULA ,AS ADJUSTED PURSUANT TO SUBSECTION (2)(b)(IVOF THIS SECTIO:
EV 1/n CAGR= ‰ ‰ BV !1 100 (II) S USED IN THIS SUBSECTIO(2)(b):
(A) "A PPLICABLE FORECAST" MEANS EITHER THE QUARTERLY D ECEMBERREVENUEFORECASTPREPAREDBYLEGISLATIVECOUNCILSTAFF OR THE QUARTERLY DECEMBER REVENUE FORECAST PREPARED BY THE OFFICE OF STATE PLANNING AND BUDGETING IN THE D ECEMBER IMMEDIATELY PRECEDING THE APPLICABLE STATE FISCAL YEAR ,AS DETERMINEDBYWHICHIMMEDIATELYPRECEDING M ARCHFORECASTTHE JOINT BUDGET COMMITTEE OF THE GENERAL ASSEMBLY USED IN THE PREPARATION OF THE STATE BUDGET.
(B) "APPLICABLE STATE FISCAL YEA" MEANS THE FISCAL YEAR THAT BEGINS IN THE INCOME TAX YEAR FOR WHICH THE CREDIT IS -5- 1311 ALLOWED .
(C) "BV" MEANS , ON OR BEFORE DECEMBER 31, 2024,THE ESTIMATE OF THE STAT'S NONEXEMPT REVENUE FOR STATE FISCAL YEAR 2024-25 INCLUDED IN THE APPLICABLE FORECAST EXCLUDING THE PROJECTEDAGGREGATEAMOUNTOFTHETAXCREDITALLOWEDPURSUANT TO THIS SECTION AND THE PROJECTED AGGREGATE AMOUNT OF THE INCREASED PORTION OF THE EARNED INCOME TAX CREDIT ALLOWED PURSUANT TO SECTION 39-22-123.5 (3.5)CREATED IN HOUSE BILL 24-1134,ENACTEDIN 2024,FORTHEGIVENINCOMETAXYEAR ANDAFTER D ECEMBER 31,2024,THE AMOUNT OFTHE STATE SNONEXEMPT REVENUE FORSTATEFISCALYEAR 2024-25EXCLUDINGTHEAGGREGATEAMOUNTOF THE TAX CREDIT ALLOWED PURSUANT TO THIS SECTION AND THE AGGREGATEAMOUNTOFTHEINCREASEDPORTIONOFTHEEARNEDINCOME TAXCREDITALLOWEDPURSUANTTOSECTION 39-22-123.5(3.5CREATED INH OUSE BILL24-1134,ENACTED IN 2024,FOR THE GIVEN INCOME TAX YEAR .
(D) "CAGR" MEANSTHEESTIMATEDCOMPOUNDANNUALGROWTH RATE .
(E) "EV" MEANS THE ESTIMATE OF THE STATE 'S NONEXEMPT REVENUE FOR THE APPLICABLE STATE FISCAL YEAR INCLUDED IN THE APPLICABLE FORECAST EXCLUDING THE PROJECTED AGGREGATE AMOUNT OF THE TAX CREDIT ALLOWED PURSUANT TO THIS SECTION AND THE PROJECTED AGGREGATE AMOUNT OF THE INCREASED PORTION OF THE EARNEDINCOMETAXCREDITALLOWEDPURSUANTTOSECTION 39-22-123.5 (3.5)CREATEDIN H OUSEB IL24-1134,ENACTEDIN 2024,FORTHEGIVEN INCOME TAX YEAR .
(F) "N" MEANS ,FOR THE APPLICABLE STATE FISCAL YEA,THE -6- 1311 NUMBER OF STATE FISCAL YEARS THAT HAVE PASSED SINCE TH2024-25 STATE FISCAL YEA.
(G) "NONEXEMPT REVENUE "MEANS ,FOR THE APPLICABLE STATE FISCAL YEAR,THE REVENUE THAT IS IDENTIFIED AS NONEXEMTABOR REVENUESINTHEANNUALCOMPREHENSIVEFINANCIALREPORTPUBLISHED BY THE OFFICE OF THE STATE CONTROLLE.
(H) "TABOR" MEANS SECTION 20OF ARTICLE X OF THE STATE CONSTITUTION.
(III)HEEXECUTIVEDIRECTORSHALLCALCULATETHEESTIMATED ADJUSTMENT FACTOR IN ACCORDANCE WITH THIS SECTION.
(IV) THEESTIMATEDADJUSTMENTFACTORMUSTBEINCREASEDBY ONE TENTHOFONEPERCENTAGEPOINTIFTHE C OLORADOUNEMPLOYMENT RATE ,AS CALCULATED BY THE UNITED STATES B UREAU OF LABOR STATISTICS,REACHES FIVE PERCENT AND MUST BE INCREASED BY AN ADDITIONAL ONE -TENTH OF ONE PERCENTAGE POINT FOR EVERY ONE PERCENTAGE POINT INCREASE IN THECOLORADO UNEMPLOYMENT RATE ABOVE FIVE PERCENT.
(c) "EDERALPOVERTYLEVEL " MEANSTHEPOVERTYLINETHATIS REQUIRED TO BE UPDATED ANNUALLY WITHIN THE FEDERAL POVERTY GUIDELINES ADOPTED BY THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES PURSUANT TO 42 U.S.C.SEC.
9902 (2).
(d) "NFLATION"MEANSTHEANNUALPERCENTAGECHANGEINTHE U NITEDSTATES DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS CONSUMERPRICEINDEXFOR D ENVER-AURORA -LAKEWOODFORALLITEMS PAID BY ALL URBAN CONSUMERS,OR ITS APPLICABLE SUCCESSOR INDE.
(3) (a) N ADDITION TO THE CHILD TAX CREDIT ALLOWED BY SECTION 39-22-129FOR INCOME TAX YEARS COMMENCING ON OR AFTER -7- 1311 JANUARY 1,2024,BUTBEFORE ANUARY 1,2034,ARESIDENTINDIVIDUAL WHO FILES A SINGLE RETURN IS ALLOWED A FAMILY AFFORDABILITY TAX CREDIT AGAINST THE INCOME TAXES DUE UNDER THIS ARTIC22 FOR:
(I) ACHELIGIBLECHILDOFTHERESIDENTINDIVIDUALWHOISFIVE YEARS OF AGE OR YOUNGER AT THE CLOSE OF THE INCOME TAX YEAR IN THE AMOUNT OF THREE THOUSAND TWO HUNDRED DOLLARS ,ADJUSTED FORINFLATIONANDASMODIFIEDBYSUBSECTIONS (4),(5)AND (6)OFTHIS SECTION;AND (II) ACHELIGIBLECHILDOFTHERESIDENTINDIVIDUALWHOISSIX YEARSOFAGEOROLDERBUTLESSTHANSEVENTEENYEARSOFAGEATTHE CLOSE OF THE INCOME TAX YEAR IN AN AMOUNT THAT IS SEVENT-FIVE PERCENT OF THE AMOUNT ALLOWED IN SUBSECTION (3)(a)(IOF THIS SECTION,ASMODIFIEDBYSUBSECTIONS (4),(5)AND (6OFTHIS SECTION.
(b) N ADDITION TO THE CHILD TAX CREDIT ALLOWED BY SECTION 39-22-129,FORINCOME TAXYEARSCOMMENCINGONORAFTER ANUARY 1,2024,BUT BEFORE ANUARY 1,2034,TWO RESIDENT INDIVIDUALS WHO FILEAJOINTRETURNAREALLOWEDAFAMILYAFFORDABILITYTAXCREDIT AGAINST THE INCOME TAXES DUE UNDER THIS ARTICL22 FOR:
(I) EACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUALS WHO IS FIVE YEARS OFAGE OR YOUNGER AT THE CLOSE OFTHE INCOME TAX YEAR INTHEAMOUNTOFTHREETHOUSANDTWOHUNDREDDOLLARS ,ADJUSTED FORINFLATIONANDASMODIFIEDBYSUBSECTIONS (4),(5)AND (6)OFTHIS SECTION;AND (II) ACH ELIGIBLE CHILD OF THE RESIDENT INDIVIDUALS WHO IS SIXYEARSOFAGEOROLDERBUTLESSTHANSEVENTEENYEARSOFAGEAT THE CLOSE OF THE INCOME TAX YEAR IN AN AMOUNT THAT IS SEVENTY -FIVE PERCENT OF THE AMOUNT ALLOWED IN SUBSECTION -8- 1311 (3)(b)(IOF THIS SECTIO,AS MODIFIED BY SUBSECTIONS (4),(5)AND (6) OF THIS SECTION.
(4) FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2024,BUT BEFORE JANUARY 1, 2025THE CREDIT AMOUNTS IN:
(a) SUBSECTION (3)(a)(IOFTHISSECTIONAREREDUCED ,BUTNOT BELOW ZERO , BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED SEVENTY -FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL 'S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (b) SUBSECTION (3)(b)(IOFTHISSECTIONAREREDUCED ,BUTNOT BELOW ZERO , BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED SEVENTY -FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARSBYWHICHTWORESIDENTINDIVIDUALS 'ADJUSTEDGROSSINCOME EXCEEDS TWENTY -FIVE THOUSAND DOLLARS .
(5) FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2025,BUT BEFORE JANUARY 1, 2026IF THE ESTIMATED ADJUSTMENT FACTOR IS:
(a) G REATER THAN OR EQUAL TO TWO PERCENT :
(I) THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION(3)(a)(I) OF THIS SECTION IS ALLOWED FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLERETURNWITHANADJUSTEDGROSSINCOMEOFFIFTEENTHOUSAND DOLLARS OR LESS , AND THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOF THIS SECTION IS ALLOWED FOR TWO RESIDENT INDIVIDUALSWHOFILEAJOINTRETURNWITHANADJUSTEDGROSSINCOME OF TWENTY -FIVE THOUSAND DOLLARS OR LESS ;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(OFTHISSECTION IS REDUCED ,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO SIX AND -9- 1311 EIGHT HUNDRED SEVENTY -FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (III) HECREDITAMOUNTINSUBSECTION (3)(b)(OFTHISSECTION IS REDUCED ,BUT NOT BELOW ZERO , BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED SEVENTY -FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH TWO RESIDENT INDIVIDUALS ' ADJUSTEDGROSSINCOMEEXCEEDSTWENTY FIVETHOUSANDDOLLARS ;OR (b) LESS THAN TWO PERCENT ,NO CREDIT IS ALLOWED PURSUANT TO THIS SECTION.
(6) FOR INCOME TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2026,BUT BEFORE JANUARY 1, 2034,IF THE ESTIMATED ADJUSTMENT FACTOR FOR THE INCOME TAX YEAR IS:
(a) G REATER THAN OR EQUAL TO THREE AND SEVENTY FIVE ONE -HUNDREDTHS PERCENT :
(I) THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION(3)(a)(I) OF THIS SECTION IS ALLOWED FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLERETURNWITHANADJUSTEDGROSSINCOMEOFFIFTEENTHOUSAND DOLLARS OR LESS , AND THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOF THIS SECTION IS ALLOWED FOR TWO RESIDENT INDIVIDUALSWHOFILEAJOINTRETURNWITHANADJUSTEDGROSSINCOME OF TWENTY -FIVE THOUSAND DOLLARS OR LESS ;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(OFTHISSECTION IS REDUCED ,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED SEVENTY -FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND -10- 1311 (III) HECREDITAMOUNTINSUBSECTION (3)(b)(OFTHISSECTION IS REDUCED, BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO SIX AND EIGHT HUNDRED SEVENTY FIVE ONE-THOUSANDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH TWO RESIDENT INDIVIDUALS ' ADJUSTED GROSS INCOME EXCEEDS TWENTY FIVE THOUSAND DOLLARS ;
(b) GREATER THAN OR EQUAL TO THREE AND FIFTY -SIX ONE -HUNDREDTHS PERCENT ,BUT LESS THAN THREE AND SEVENTY -FIVE ONE -HUNDREDTHS PERCENT ,THEN :
(I) THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTIO(3)(a)(I) OF THIS SECTION IS ALLOWED FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLERETURNWITHANADJUSTEDGROSSINCOMEOFFIFTEENTHOUSAND DOLLARS OR LESS , AND THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOF THIS SECTION IS ALLOWED FOR TWO RESIDENT INDIVIDUALSWHOFILEAJOINTRETURNWITHANADJUSTEDGROSSINCOME OF TWENTY -FIVE THOUSAND DOLLARS OR LESS;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(OFTHISSECTION IS REDUCED,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO NINE AND SIX ONE-HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL 'S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (III) HECREDITAMOUNTINSUBSECTION (3)(b)(OFTHISSECTION IS REDUCED,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO NINE AND SIX ONE-HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH TWO RESIDENT INDIVIDUALS 'ADJUSTED GROSS INCOME EXCEEDS TWENTY -FIVE THOUSAND DOLLARS ;
(c) G REATER THAN OR EQUAL TO THREE AND THIRTY SEVEN ONE -HUNDREDTHS PERCENT , BUT LESS THAN THREE AND FIFTY -SIX -11- 1311 ONE -HUNDREDTHS PERCENT ,THEN :
(I) THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION(3)(a)(I) OF THIS SECTION IS ALLOWED FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLERETURNWITHANADJUSTEDGROSSINCOMEOFFIFTEENTHOUSAND DOLLARS OR LESS , AND THE FULL CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOF THIS SECTION IS ALLOWED FOR TWO RESIDENT INDIVIDUALSWHOFILEAJOINTRETURNWITHANADJUSTEDGROSSINCOME OF TWENTY -FIVE THOUSAND DOLLARS OR LESS;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(IOFTHISSECTION IS REDUCED,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO THIRTEEN AND FIFTY-NINE ONE-HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (III) HECREDITAMOUNTINSUBSECTION (3)(b)(OFTHISSECTION IS REDUCED,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO THIRTEEN AND FIFTY-NINE ONE-HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARSBYWHICHTWORESIDENTINDIVIDUALS 'ADJUSTEDGROSSINCOME EXCEEDS TWENTY -FIVE THOUSAND DOLLARS ;
(d) GREATER THAN OR EQUAL TO THREE AND EIGHTEEN ONE -HUNDREDTHS PERCENT ,BUT LESS THAN THREE AND THIRTY-SEVEN ONE -HUNDREDTHS PERCENT ,THEN :
(I) THE CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(a)(OF THIS SECTION IS REDUCED TO TWO THOUSAND SIX HUNDRED DOLLARS , ADJUSTED FOR INFLATION , FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLERETURNWITHANADJUSTEDGROSSINCOMEOFFIFTEENTHOUSAND DOLLARS OR LESS ,AND THE CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOF THIS SECTION IS REDUCED TO TWO THOUSAND SIX HUNDRED -12- 1311 DOLLARS ,ADJUSTEDFORINFLATION FORTWORESIDENTINDIVIDUALSWHO FILE A JOINT RETURN WITH AN ADJUSTED GROSS INCOME OF TWENT-FIVE THOUSAND DOLLARS OR LESS ;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(OFTHISSECTION , AS MODIFIED BY SUBSECTION (6)(d)(OF THIS SECTIO,IS REDUCED,BUT NOT BELOW ZERO , BY AN AMOUNT EQUAL TO NINETEEN AND TWENTY THREE ONE -HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BY WHICH A RESIDENT INDIVIDUAL S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (III) T HE CREDIT AMOUNT IN SUBSECTION (3)(b)(I)OF THIS SECTION ,ASMODIFIEDBYSUBSECTION (6)(d)(OFTHISSECTION ,WILLBE REDUCED ,BUTNOTBELOWZERO BYANAMOUNTEQUALTONINETEENAND TWENTY THREE ONE -HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARSBYWHICHTWORESIDENTINDIVIDUALS ADJUSTEDGROSSINCOME EXCEEDS TWENTY -FIVE THOUSAND DOLLARS ;
(e) GREATER THAN OR EQUAL TO THREE PERCENT ,BUT LESS THAN THREE AND EIGHTEEN ONE -HUNDREDTHS PERCENT THEN :
(I) THE CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(a)(OF THIS SECTION IS REDUCED TO ONE THOUSAND SIX HUNDRED FIFTY DOLLARS ,ADJUSTED FOR INFLATION ,FOR A RESIDENT INDIVIDUAL WHO FILES A SINGLE RETURN WITH AN ADJUSTED GROSS INCOME OF FIFTEEN THOUSAND DOLLARS OR LESS ,AND THE CREDIT AMOUNT SET FORTH IN SUBSECTION (3)(b)(IOFTHISSECTIONISREDUCEDTOONETHOUSANDSIX HUNDRED FIFTY DOLLARS ,ADJUSTED FOR INFLATION,FOR TWO RESIDENT INDIVIDUALSWHOFILEAJOINTRETURNWITHANADJUSTEDGROSSINCOME OF TWENTY -FIVE THOUSAND DOLLARS OR LESS;
(II) HECREDITAMOUNTINSUBSECTION (3)(a)(OFTHISSECTION , -13- 1311 AS MODIFIED BY SUBSECTION(6)(e)(OF THIS SECTIO,IS REDUCED,BUT NOT BELOW ZERO , BY AN AMOUNT EQUAL TO THIRTY AND THIRTY ONE HUNDREDTHSPERCENTFOREACHFIVETHOUSANDDOLLARSBYWHICH A RESIDENT INDIVIDUAL'S ADJUSTED GROSS INCOME EXCEEDS FIFTEEN THOUSAND DOLLARS ;AND (III) THE CREDIT AMOUNT IN SUBSECTION (3)(b)(IOF THIS SECTION, AS MODIFIED BY SUBSECTION (6)(e)(IOF THIS SECTIO, IS REDUCED ,BUT NOT BELOW ZERO ,BY AN AMOUNT EQUAL TO THIRTY AND THIRTY ONE-HUNDREDTHS PERCENT FOR EACH FIVE THOUSAND DOLLARS BYWHICHTWORESIDENTINDIVIDUALS ADJUSTEDGROSSINCOMEEXCEEDS TWENTY -FIVE THOUSAND DOLLARS ;OR (f) ESSTHANTHREEPERCENT ,NOCREDITISALLOWEDPURSUANT TO THIS SECTIO.
(7) FOR INCOME TAX YEARS COMMENCING ON OR AFTERJANUARY 1, 2025,THE DEPARTMENT OF REVENUE SHALL ADJUST THE FEDERAL ADJUSTED GROSS INCOME AMOUNTS SET FORTH IN THIS SECTION TO REFLECT INFLATION FOR EACH INCOME TAX YEAR IN WHICH THE CREDIT DESCRIBEDINTHISSECTIONISALLOWEDIFCUMULATIVE INFLATIONSINCE THE LAST ADJUSTMENT WHEN APPLIED TO THE CURRENT LIMIT,RESULTS IN AN INCREASE OF AT LEAST ONE THOUSAND DOLLARS WHEN THE ADJUSTED LIMITS ARE ROUNDED TO THE NEAREST ONE THOUSAND DOLLARS .
(8) NTHE CASE OFAPART -YEARRESIDENT ,THE CREDIT ALLOWED UNDER THIS SECTION IS APPORTIONED IN THE RATIO DETERMINED UNDER SECTION 39-22-110 (1).
(9) THECREDITALLOWEDUNDERTHISSECTIONISNOTCONSIDERED TO BE INCOME OR RESOURCES FOR THE PURPOSE OF DETERMINING -14- 1311 ELIGIBILITY FOR THE PAYMENT OF PUBLIC ASSISTANCE BENEFITS AND MEDICALASSISTANCEBENEFITSAUTHORIZEDUNDERSTATELAWORFORA PAYMENT MADE UNDER ANY OTHER PUBLICLY FUNDED PROGRAMS .
(10) THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION THAT EXCEEDS THE RESIDENT INDIVIDUAL S INCOME TAXES DUE IS REFUNDED TO THE INDIVIDUAL.
(11) T HE DEPARTMENT OF REVENUE IS AUTHORIZED AND ENCOURAGEDTODEVELOPAMEANSOFPAYINGTHECREDITSALLOWEDBY THIS SECTION TO RESIDENT INDIVIDUALS WHO QUALIFY FOR THE CREDITS IN TWELVE EQUAL MONTHLY PAYMENTS RATHER THAN ANNUALLY .
(12) THIS SECTION IS REPEAL,EFFECTIVED ECEMBER 31, 2037.
SECTION 2.
Appropriation.
(1) For the 2024-25 state fiscalyear, $178,494 is appropriated to the department of revenue.
This appropriation is from the general fund.
To implement this act, the department may use this appropriation as follows:
(a) $88,604 for use by the taxation business group for personal services related to taxation services, which amount is based on the assumption that the division will require an additional 1.2 FTE;
(b) $33,604 for tax administration IT system (GenTax) support;
(c) $8,206 for use by the taxation business group for operating expenses related to taxation services;
(d) $22,085 for use by the executive director's office for personal services related to administration and support;
and (e) $25,995 for document management services.
(2) Forthe2024-25statefiscalyear,$25,995isappropriatedtothe departmentofpersonnel.Thisappropriationisfromreappropriatedfunds received from the department of revenue under subsection (1)(e) of this -15- 1311 section.
To implement this act, the department of personnel may use this appropriation to provide document management services for the department of revenue.
SECTION 3.
Act subject to petition - effective date.
This act takes effect at 12:01 a.m.
on the day following the expiration of the ninety-dayperiodafterfinaladjournmentof thegeneralassembly;except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2024 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.
-16- 1311