An Act To Strengthen the Benefits of the State Earned Income Tax Credit for Childless Workers
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% 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% on or after January 1, 2015, the applicable percentage for an individual with no qualifying child is 50%.
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the tax otherwise due under this Part in the amount of 5% 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% on or after January 1, 2015, the applicable percentage for an individual with no qualifying child is 50%, 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% 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% on or after January 1, 2015, the applicable percentage for an individual with no qualifying child is 50%, 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. Limitation. The credit allowed by this section may not reduce the Maine income tax to less than zero , except that for tax years beginning on or after January 1, 2015, the credit for an individual with no qualifying child is refundable.
summary
This bill increases the state earned income tax credit for an individual with no qualifying child from 5% to 50% of the federal credit and makes it refundable.