HB1955

Report Title:

Earned income tax credit

Description:

Establishes a state earned income tax credit (EITC) equal to 20 percent of the federal EITC.

HOUSE OF REPRESENTATIVES	H.B. NO.	1955
TWENTY-FIRST LEGISLATURE, 2002
STATE OF HAWAII

A BILL FOR AN ACT

 

RELATING TO EARNED INCOME TAX CREDIT.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Earned income tax credit. (a) Each resident individual taxpayer who files an individual net income tax return for a taxable year, and who is not claimed or is not otherwise eligible to be claimed as a dependent by another taxpayer for income tax purposes, may claim an earned income tax credit equal to twenty per cent of the federal earned income tax credit determined under section 32 of the Internal Revenue Code, as amended, and in effect for the current taxable year.

(b) The credit shall be allowed against the taxes imposed by this chapter for the taxable year, reduced by other credits permitted by this section. If the tax credit exceeds the taxpayer's income tax liability, the director of taxation shall treat the excess as an overpayment, and shall pay the taxpayer, without interest, the amount of the excess in the form of a refund to the taxpayer; provided that no refunds or payment on account of the tax credits allowed by this section be made for amounts less than $1.

(c) In the case of a husband and wife filing an individual net income tax return separately, the tax credit allowed may be applied against the tax of either spouse, or divided between them, as they elect; provided that the total amount of the total amount of the tax credit claimed by both spouses shall not exceed the amount claimed under subsection (a).

(d) The director of taxation shall make efforts every year to alert taxpayers who may be eligible to receive the credit. In making a determination as to whether a taxpayer may be eligible for such a credit, the director of taxation shall use appropriate and available data, including but not limited to data available from the United States Department of Treasury, the Internal Revenue Service, and state income tax returns from preceding tax years.

(e) The director of taxation shall prepare an annual report containing statistical information regarding the credits granted for the prior calendar year, including the total amount of revenue expended on the earned income tax credit, the number of credits claimed, and the average value of credits granted to taxpayers whose earned income falls within various income ranges."

SECTION 2. New statutory material is underscored.

SECTION 3. This Act shall take effect for taxable years beginning on or after January 1, 2003.

INTRODUCED BY:	_____________________________