Senate Bill No. 367 amends Section 2357.43 of the Oklahoma income tax law to adjust the calculation of the earned income tax credit for residents. The bill establishes that for tax years 2002 through 2021 and for tax year 2026 and subsequent years, the credit will be set at five percent (5%) of the earned income tax credit allowed under Section 32 of the Internal Revenue Code, as amended. The bill also specifies that for tax years 2022 through 2025, the credit will be computed using the same requirements as those for the 2020 income tax year, maintaining the five percent (5%) rate.

Additionally, the bill clarifies that the credit will not be paid in advance and that if the credit exceeds the tax imposed, the excess will be refunded to the taxpayer. The maximum earned income tax credit will be prorated based on the ratio of Oklahoma adjusted gross income to federal adjusted gross income. The act is set to take effect on November 1, 2025.