An Act To Increase the State Earned Income Credit
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5219-S, as amended by PL 2009, c. 213, Pt. BBBB, §16, is further amended to read:
§ 5219-S. Earned income credit
1. Resident taxpayer. A resident individual is allowed a credit against the tax otherwise due under this Part in the amount of 5% 10% of the federal earned income credit for the same taxable year, except that for tax years beginning in 2009 and 2010, the applicable percentage is 4% and for tax years beginning in 2011 but ending before 2015 the applicable percentage is 5%.
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the tax otherwise due under this Part in the amount of 5% 10% of the federal earned income credit for the same taxable year, except that for tax years beginning in 2009 and 2010, the applicable percentage is 4% and for tax years beginning in 2011 but ending before 2015 the applicable percentage is 5%, multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122.
3. Part-year resident taxpayer. An individual who files a return as a part-year resident in accordance with section 5224-A is allowed a credit against the tax otherwise due under this Part in the amount of 5% 10% of the federal earned income credit for the same taxable year, except that for tax years beginning in 2009 and 2010, the applicable percentage is 4% and for tax years beginning in 2011 but ending before 2015 the applicable percentage is 5%, multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.
4. Refund. The credit allowed by this section may not reduce the Maine income tax to less than zero is fully refundable, except that, for tax years beginning before 2015, the credit allowed by this section may not reduce the Maine income tax to less than zero.
Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 2015.
summary
This bill, beginning in 2015, increases the state earned income credit from 5% to 10% of the federal earned income credit and provides that the state earned income credit is fully refundable.