Budget Amendment ID: FY2022-S3-51-R2

2nd Redraft GOV 51

Increasing the Earned Income Tax Credit (EITC)

Mr. Tarr, Ms. DiZoglio, Mr. O'Connor, Ms. Moran, Messrs. Brady and Montigny moved that the proposed new text be amended by inserting after section _ the following:-

SECTION_. Section 6 of chapter 62 of the General Laws, as appearing in the 2018 official edition, is hereby amended by striking out subsection (h) and inserting in place thereof the following subsection:-

(h)(1)  A taxpayer shall be allowed a credit against the taxes imposed by this chapter if that person qualified for and claimed the earned income credit allowed under section 32 of the Code, as amended and in effect for the taxable year.  With respect to a person who is a nonresident for part of the taxable year, the credit shall be limited to 50 per cent of the federal credit multiplied by a fraction, the numerator of which shall be the number of days in the taxable year the person resided in the commonwealth and the denominator of which shall be the number of days in the taxable year.  A person who is a nonresident for the entire taxable year shall not be allowed the credit.  The credit allowed by this subsection shall equal 50 per cent of the federal credit received by the taxpayer for the taxable year.  If other credits allowed under this section are utilized by the taxpayer for the taxable year, the credit afforded by this subsection shall be applied last.  If the amount of the credit allowed under this subsection exceeds the taxpayer's liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer the amount of the excess without interest. No credit shall be allowed under this subsection for any taxable year within (1) the period of 10 taxable years after the most recent taxable year for which there was a final determination by the commissioner that the taxpayer’s claim of the credit under this subsection was based on information that the taxpayer knew or had reason to know was false, fraudulent or deliberately misleading as to a material matter, or (2) the period of 2 taxable years after the most recent taxable year for which there was a final determination by the commissioner that the taxpayer’s claim of credit under this subsection was due to careless, reckless or intentional disregard by the taxpayer of the tax laws of the commonwealth or of public written statements issued by the commissioner.

(2)  For the purposes of this subsection, a married taxpayer shall satisfy the joint filing requirement under section 32 of the Code if the taxpayer files an income tax return using a filing status of married filing separately and the taxpayer: (i) is living apart from the taxpayer’s spouse at the time the taxpayer files the tax return; (ii) is unable to file a joint return because the taxpayer is a victim of domestic abuse; and (iii) indicates on the taxpayer’s income tax return that the taxpayer meets the criteria of clauses (i) and (ii).