Title 36: TAXATION

Part 8: INCOME TAXES

Chapter 822: TAX CREDITS

§5213-A. Sales tax fairness credit

For 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.   [PL 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.   [PL 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.   [PL 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).   [PL 2017, c. 474, Pt. B, §10 (AMD).]

[PL 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.  

[PL 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.  

[PL 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.   [PL 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.   [PL 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.   [PL 2015, c. 267, Pt. DD, §19 (NEW).]

[PL 2015, c. 267, Pt. DD, §19 (NEW).]

5.  Refundability of credit.  The tax credit allowed under this section is refundable.  

[PL 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;   [PL 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   [PL 2017, c. 474, Pt. B, §11 (AMD).]

C. Individuals who may be claimed as a dependent on another taxpayer's return.   [PL 2017, c. 474, Pt. B, §11 (NEW).]

[PL 2017, c. 474, Pt. B, §11 (AMD).]

SECTION HISTORY

RR 2015, c. 1, §42 (COR). PL 2015, c. 267, Pt. DD, §19 (NEW). PL 2015, c. 328, §4 (AMD). PL 2017, c. 474, Pt. B, §§8-11 (AMD).