Maryland SB 717: Earned Income Tax Credit - Individuals Without Qualifying Children - Eligibility

Bill Text

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0717*

SENATE BILL 717
Q3 0lr3540
SB 263/19 – B&T CF HB 679
By: Senators Griffith, Augustine, Elfreth, Ellis, Hayes, and McCray
Introduced and read first time: February 3, 2020
Assigned to: Budget and Taxation

A BILL ENTITLED

AN ACT concerning 1

Earned Income Tax Credit – Individuals Without Qualifying Children 2
– Eligibility 3

FOR the purpose of expanding the eligibility of the Maryland earned income tax credit to 4
allow certain individuals without qualifying children to claim the credit; providing 5
that the amount of the credit that may be claimed by certain individuals is adjusted 6
for inflation each year; providing for the application of this Act; and generally 7
relating to the Maryland earned income tax credit. 8

BY repealing and reenacting, with amendments, 9
Article – Tax – General 10
Section 10–704 11
Annotated Code of Maryland 12
(2016 Replacement Volume and 2019 Supplement) 13

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15

Article – Tax – General 16

10–704. 17

(a) (1) A resident may claim a credit against the State income tax for a taxable 18
year in the amount determined under subsection (b) of this section for earned income. 19

(2) A resident may claim a credit against the county income tax for a 20
taxable year in the amount determined under subsection (c) of this section for earned 21
income. 22

(b) (1) Except as provided in paragraphs (2) and (3) of this subsection and 23
subject to subsection (d) of this section, the credit allowed against the State income tax 24

2 SENATE BILL 717

under subsection (a)(1) of this section is the lesser of: 1

(i) 50% of the earned income credit allowable for the taxable year 2
under § 32 of the Internal Revenue Code; or 3

(ii) the State income tax for the taxable year. 4

(2) (i) Subject to subsection (d) of this section, a resident may claim a 5
refund in the amount, if any, by which the applicable percentage specified in subparagraph 6
(ii) of this paragraph of the earned income credit allowable for the taxable year under § 32 7
of the Internal Revenue Code exceeds the State income tax for the taxable year. 8

(ii) The applicable percentage of the earned income credit allowable 9
under § 32 of the Internal Revenue Code to be used for purposes of determining the refund 10
provided under this paragraph is: 11

1. 25% for a taxable year beginning after December 31, 2013, 12
but before January 1, 2015; 13

2. 25.5% for a taxable year beginning after December 31, 14
2014, but before January 1, 2016; 15

3. 26% for a taxable year beginning after December 31, 2015, 16
but before January 1, 2017; 17

4. 27% for a taxable year beginning after December 31, 2016, 18
but before January 1, 2018; and 19

5. 28% for a taxable year beginning after December 31, 2017. 20

(3) (I) THE CREDIT ALLOWED AGAINST THE STATE INCOME TAX 21
UNDER SUBSECTION (A)(1) OF THIS SECTION FOR AN INDIVIDUAL WITHOUT A 22
QUALIFYING CHILD IS CALCULATED BY SUBSTITUTING: 23

1. $6,920 FOR THE EARNED INCOME AMOUNT IN § 24
32(B)(2)(A) OF THE INTERNAL REVENUE CODE; AND 25

2. $16,630 FOR THE PHASE–OUT AMOUNT IN § 26
32(B)(2)(A) OF THE INTERNAL REVENUE CODE. 27

(II) 1. FOR EACH TAXABLE YEAR BEGINNING AFTER 28
DECEMBER 31, 2020, THE EARNED INCOME AMOUNT AND PHASE–OUT AMOUNT IN 29
SUBPARAGRAPH (I) OF THIS PARAGRAPH SHALL BE INCREASED BY AN AMOUNT 30
EQUAL TO THE PRODUCT OF MULTIPLYING EACH AMOUNT BY THE COST–OF–LIVING 31
ADJUSTMENT SPECIFIED IN SUBSUBPARAGRAPH 2 OF THIS SUBPARAGRAPH. 32

SENATE BILL 717 3

2. FOR PURPOSES OF THIS SUBPARAGRAPH, THE 1
COST–OF–LIVING ADJUSTMENT IS THE COST–OF–LIVING ADJUSTMENT WITHIN THE 2
MEANING OF § 1(F)(3) OF THE INTERNAL REVENUE CODE FOR THE CALENDAR YEAR 3
IN WHICH THE TAXABLE YEAR BEGINS, AS DETERMINED BY THE COMPTROLLER BY 4
SUBSTITUTING “CALENDAR YEAR 2019” FOR “CALENDAR YEAR 2016” IN § 1(F)(3)(B) 5
OF THE INTERNAL REVENUE CODE. 6

3. IF ANY INCREASE DETERMINED UNDER 7
SUBSUBPARAGRAPH 1 OF THIS SUBPARAGRAPH IS NOT A MULTIPLE OF $10, THE 8
INCREASE SHALL BE ROUNDED DOWN TO THE NEXT LOWEST MULTIPLE OF $10. 9

(III) For purposes of this section for an individual without a qualifying 10
child, the credit allowable for a taxable year under § 32 of the Internal Revenue Code is 11
calculated without regard to the minimum age requirement under § 32(c)(1)(A)(ii)(II) of the 12
Internal Revenue Code. 13

(c) (1) Except as provided in paragraph (2) of this subsection and subject to 14
subsection (d) of this section, the credit allowed against the county income tax under 15
subsection (a)(2) of this section is the lesser of: 16

(i) the earned income credit allowable for the taxable year under § 17
32 of the Internal Revenue Code multiplied by 10 times the county income tax rate for the 18
taxable year; or 19

(ii) the county income tax for the taxable year. 20

(2) (i) A county ma