North Carolina HB 1259: Refund Federal Retirees.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H 2

HOUSE BILL 1259
Committee Substitute Favorable 6/13/96

Short Title: Refund Federal Retirees. (Public)

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Sponsors:

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Referred to:

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May 21, 1996

A BILL TO BE ENTITLED 1
AN ACT TO PROVIDE FEDERAL RETIREES A REFUNDABLE TAX CREDIT, 2
WITHOUT INTEREST, FOR STATE INCOME TAX PAID ON THEIR 3
RETIREMENT BENEFITS FOR TAX YEARS 1985 THROUGH 1988. 4
The General Assembly of North Carolina enacts: 5
Section 1. G.S. 105-151.20 reads as rewritten: 6
"§ 105-151.20. Credit Refundable credit for tax paid on certain government federal 7
retirement benefits. 8
(a) Purpose; Definitions. – The purpose of this section is to benefit certain retired 9
federal government workers on account of their public service. The following definitions 10
apply in this section: 11
(1) Federal retirement benefits. – Retirement benefits received from one or 12
more federal government retirement plans. 13
(2) Net pension tax. – The amount of tax a taxpayer paid under this 14
Division for the 1985, 1986, 1987, and 1988 tax years on federal 15
retirement benefits, without interest, less any part of the tax for which 16
the taxpayer received a credit under this section before 1997 and any 17
part of the tax refunded to the taxpayer before 1997. 18

GENERAL ASSEMBLY OF NORTH CAROLINA 1995
Page 2 HOUSE BILL 1259 version 2
(3) Tax year. – The taxpayer's taxable year beginning on a day in the 1
applicable calendar year. 2
(b) Credit. – A taxpayer who received government federal retirement benefits 3
during the 1985, 1986, 1987, or 1988 tax year may claim a credit against the tax imposed 4
by this Division equal to the net pension tax on those benefits. In the case of a taxpayer 5
who is deceased, the surviving spouse may claim the credit in the name of the deceased 6
taxpayer; if there is no surviving spouse, the representative of the taxpayer's estate may 7
claim the credit in the name of the deceased taxpayer. The amount by which the tax under 8
this Division paid by the taxpayer for the 1988 tax year would have been reduced if none of the 9
taxpayer's government retirement benefits had been included in the taxpayer's taxable income. If 10
a taxpayer received a refund of any tax paid under this Division on government retirement 11
benefits for the 1988 tax year, the amount of the refund reduces the amount of the credit allowed 12
under this section. 13
As used in this section, the term "government retirement benefits" means retirement 14
benefits received from one or more state, local, or federal government retirement plans. 15
As used in this section, the term "1988 tax year" means the taxpayer's taxable year 16
beginning on a day in 1988. 17
The 18
credit allowed under this section shall be taken in equal installments over the taxpayer's 19
first three four taxable years beginning on or after January 1, 1990. 1997. In order to 20
claim a credit under this section, a taxpayer must provide any information required by the 21
Secretary to establish the taxpayer's eligibility for credit and the amount of the credit. 22
The credit allowed under this section may not exceed the amount of tax imposed by this Division 23
reduced by the sum of all credits allowed against the tax, except payments of tax made by or on 24
behalf of the taxpayer. 25
(c) Credit Refundable. – If an installment of the credit allowed by this section 26
exceeds the amount of tax imposed by this Division for the taxable year reduced by the 27
sum of all credits allowable, the Secretary shall refund the excess to the taxpayer. The 28
refundable excess is governed by the provisions governing a refund of an overpayment 29
by the taxpayer of the tax imposed in this Division. In computing the amount of tax 30
against which multiple credits are allowed, nonrefundable credits are subtracted before 31
refundable credits." 32
Sec. 2. Effective January 1, 2006, G.S. 105-151.20 is repealed. 33
Sec. 3. Section 2 of this act becomes effective January 1, 2006. The 34
remainder of this act is effective for taxable years beginning on or after January 1, 1997. 35