Legislative Document No. 104 S.P. 31 In Senate, January 15, 2019
An Act To Expand the Earned Income Tax Credit in Maine
Reference to the Committee on Taxation suggested and ordered printed.
DAREK M. GRANT Secretary of the Senate
Presented by Senator VITELLI of Sagadahoc. Cosponsored by Representative TEPLER of Topsham and Senators: BREEN of Cumberland, CHIPMAN of Cumberland, LIBBY of Androscoggin, SANBORN, H. of Cumberland, Representatives: EVANGELOS of Friendship, PLUECKER of Warren, STEWART of Presque Isle.
Printed on recycled paper 1 Be it enacted by the People of the State of Maine as follows:
2 Sec. 1. 26 MRSA §42-C is enacted to read: 3 §42-C. Notification regarding earned income tax credit eligibility
4 1. Bureau to provide poster or notice. The bureau shall produce and furnish to 5 employers posters or notices in printed form that state that an employee may be eligible 6 for federal and state earned income tax credits and that the employee may apply for the 7 tax credits on the employee's income tax returns.
8 2. Employer to post notice. An employer shall post and keep posted in a place 9 accessible to the employer's employees a copy of the printed poster or notice furnished by 10 the bureau. An employer who violates this section is subject to the same penalties set 11 forth in section 42-B, subsection 3.
12 Sec. 2. 36 MRSA §5219-S, as amended by PL 2015, c. 328, §8, is further 13 amended to read:
14 §5219-S. Earned income credit
15 1. Resident taxpayer. A resident individual who is an eligible individual is allowed 16 a credit against the tax otherwise due under this Part in the amount of 5% 15% of the 17 federal earned income credit for the same taxable year, except that for tax years 18 beginning in 2009 and 2010, the applicable percentage is 4%.
19 2. Nonresident taxpayer. A nonresident individual who is an eligible individual is 20 allowed a credit against the tax otherwise due under this Part in the amount of 5% 15% of 21 the federal earned income credit for the same taxable year, except that for tax years 22 beginning in 2009 and 2010, the applicable percentage is 4%, multiplied by the ratio of 23 the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, 24 paragraph B, to the individual's entire federal adjusted gross income, as modified by 25 section 5122.
26 3. Part-year resident taxpayer. An eligible individual who files a return as a part- 27 year resident in accordance with section 5224-A is allowed a credit against the tax 28 otherwise due under this Part in the amount of 5% 15% of the federal earned income 29 credit for the same taxable year, except that for tax years beginning in 2009 and 2010, the 30 applicable percentage is 4%, multiplied by a ratio, the numerator of which is the 31 individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, 32 paragraph A for that portion of the taxable year during which the individual was a 33 resident plus the individual's Maine adjusted gross income as defined in section 5102, 34 subsection 1-C, paragraph B for that portion of the taxable year during which the 35 individual was a nonresident and the denominator of which is the individual's entire 36 federal adjusted gross income, as modified by section 5122.
37 4. Limitation. The credit allowed by this section may not reduce the Maine income 38 tax to less than zero, except that for tax years beginning on or after January 1, 2016, the 39 credit allowed under subsections 1 and 3 is refundable.
Page 1 - 129LR0163(01)-1 1 5. Eligible individual less than 25 years of age. The credit for an eligible 2 individual who is entitled to a credit under subsections 1 to 3, has not attained 25 years of 3 age and does not have a qualifying child for the taxable year must be calculated in the 4 same manner as it would be calculated if that individual were eligible for a federal earned 5 income credit.
6 6. Eligible individual defined. For tax years beginning on or after January 1, 2019, 7 for the purposes of this section, unless the context otherwise indicates, "eligible 8 individual" has the same meaning as under Section 32(c)(1) of the Code except that 9 "eligible individual" also includes an individual who does not have a qualifying child for 10 the taxable year, who is at least 18 years of age and has not attained the age of 25 before 11 the close of the taxable year and who also meets the qualifications under Section 12 32(c)(1)(A)(ii)(I) and (III) of the Code.
13 SUMMARY 14 This bill expands the earned income tax credit by increasing the credit from 5% to 15 15% of the federal earned income tax credit and extending the credit to persons from 18 16 to 24 years of age who have no qualifying child.
17 This bill also requires the Department of Labor, Bureau of Labor Standards to 18 provide a poster or notice to employers that states that employees may be eligible for the 19 earned income tax credit. This bill requires employers to post the poster or notice in a 20 place that is accessible to the employers' employees.
Page 2 - 129LR0163(01)-1