Budget Amendment ID: FY2016-S3-6

OTH 6

Expand Earned Income Tax Credit and Increase Personal Exemptions

Messrs. Rodrigues, Downing and Brownsberger, Ms. Chang-Diaz, Messrs. Keenan and Pacheco moved that the proposed new text be amended by inserting after section 31 the following 5 sections:-

“SECTION 31A. Subparagraph (1) of paragraph (b) of part B of section 3 of chapter 62 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by striking out clause (A) and inserting in place thereof the following clause:-

(A) a personal exemption of $4,800 for tax years beginning on or after January 1, 2016;.

SECTION 31B. Subparagraph (1A) of said paragraph (b) of said part B of said section 3 of said chapter 62, as so appearing, is hereby amended by striking out clause (A) and inserting in place thereof the following clause:-

(A)a personal exemption of $7,400 for tax years beginning on or after January 1, 2016;.

SECTION 31C. Subparagraph (2) of said paragraph (b) of said part B of said section 3 of said chapter 62, as so appearing, is hereby amended by striking out clause (A) and inserting in place thereof the following clause:-

(A) a personal exemption of $9,600 for tax years beginning on or after January 1, 2016;.

SECTION 31D. Section 4 of said chapter 62, as so appearing, is hereby amended by striking out subsection (b) and inserting in place thereof the following subsection:-

(b) Part B taxable income shall be taxed at a rate of 5.15 per cent for tax years beginning on or after January 1, 2016.

SECTION 31E. Subsection (h) of section 6 of said chapter 62, as so appearing, is hereby amended by striking out the second and third sentences and inserting in place thereof the following 2 sentences:- The credit allowed by this subsection shall equal the following amounts: (i) for the taxable year beginning on January 1, 2015, 18 per cent of the federal credit received by the taxpayer for the taxable year; (ii) for the taxable year beginning on January 1, 2016, 21 per cent of the federal credit received by the taxpayer for the taxable year; and (iii) for each taxable year beginning on or after January 1, 2017, 22.5 per cent of the federal credit received by the taxpayer for the taxable year. With respect to a person who is a nonresident for all or part of the taxable year, the credit shall be limited to the amount specified in the preceding sentence, multiplied by a fraction the numerator of which shall be the earned income of the nonresident from Massachusetts sources and the denominator of which shall be the earned income of the nonresident from all sources.”; and

by inserting after section 106 the following 2 sections:-

“SECTION 106A. Section 31E shall take effect as of January 1, 2015 for the tax years beginning on January 1, 2015.

SECTION 107A.  Sections 31A to 31D, inclusive, shall take effect on January 1, 2016 for the tax years beginning on January 1, 2016.”.