| 1 | 1 | | Stricken language would be deleted from and underlined language would be added to present law. |
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| 2 | 2 | | *CEB026* 11/20/2024 10:45:30 AM CEB026 |
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| 3 | 3 | | State of Arkansas 1 |
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| 4 | 4 | | 95th General Assembly A Bill 2 |
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| 5 | 5 | | Regular Session, 2025 HOUSE BILL 1026 3 |
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| 6 | 6 | | 4 |
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| 7 | 7 | | By: Representative A. Collins 5 |
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| 8 | 8 | | 6 |
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| 9 | 9 | | 7 |
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| 10 | 10 | | For An Act To Be Entitled 8 |
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| 11 | 11 | | AN ACT TO CREATE THE ARKANSAS PROMISE ACT; TO AMEND 9 |
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| 12 | 12 | | THE INDIVIDUAL INCOME TAX LAWS; TO CREATE AN INCOME 10 |
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| 13 | 13 | | TAX CREDIT FOR TUITION FOR AN ELIGIBLE STUDENT AT A 11 |
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| 14 | 14 | | PUBLIC INSTITUTION OF HIGHER EDUCATION; AND FOR OTHER 12 |
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| 15 | 15 | | PURPOSES. 13 |
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| 16 | 16 | | 14 |
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| 17 | 17 | | 15 |
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| 18 | 18 | | Subtitle 16 |
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| 19 | 19 | | TO CREATE THE ARKANSAS PROMISE ACT; AND 17 |
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| 20 | 20 | | TO CREATE AN INCOME TAX CREDIT FOR 18 |
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| 21 | 21 | | TUITION PAID FOR AN ELIGIBLE STUDENT AT 19 |
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| 22 | 22 | | A PUBLIC INSTITUTION OF HIGHER 20 |
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| 23 | 23 | | EDUCATION. 21 |
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| 24 | 24 | | 22 |
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| 25 | 25 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 23 |
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| 26 | 26 | | 24 |
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| 27 | 27 | | SECTION 1. Arkansas Code Title 26, Chapter 51, Subchapter 5, is 25 |
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| 28 | 28 | | amended to add an additional section to read as follows: 26 |
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| 29 | 29 | | 26-51-518. Arkansas Promise Act — Higher education tuition income tax 27 |
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| 30 | 30 | | credit — Definition. 28 |
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| 31 | 31 | | (a) This section shall be known and may be cited as the "Arkansas 29 |
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| 32 | 32 | | Promise Act". 30 |
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| 33 | 33 | | (b) As used in this section, "tuition" means charges levied for 31 |
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| 34 | 34 | | attendance at a public two -year or four-year institution of higher education. 32 |
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| 35 | 35 | | (c) There is allowed an income tax credit against the income tax 33 |
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| 36 | 36 | | imposed by this chapter in the amount paid by a taxpayer as tuition for the 34 |
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| 37 | 37 | | taxpayer or the taxpayer's dependent not including tuition paid through any 35 |
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| 38 | 38 | | scholarship or grant, subject to the limitations of subsection (d) of this 36 HB1026 |
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| 39 | 39 | | |
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| 40 | 40 | | 2 11/20/2024 10:45:30 AM |
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| 41 | 41 | | section. 1 |
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| 42 | 42 | | (d) To claim the income tax credit allowed by this section, the 2 |
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| 43 | 43 | | taxpayer must have paid tuition for a student that: 3 |
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| 44 | 44 | | (1) Is a resident with an in -state tuition classification; 4 |
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| 45 | 45 | | (2)(A) Has completed the Free Application for Federal Student 5 |
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| 46 | 46 | | Aid (FAFSA) or a subsequent application required by the United States 6 |
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| 47 | 47 | | Department of Education for federal financial aid for the semester or term 7 |
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| 48 | 48 | | for which the income tax credit is claimed. 8 |
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| 49 | 49 | | (B) The income tax credit allowed by this section shall 9 |
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| 50 | 50 | | only be claimed if the application under subdivision (d)(2)(A) reflects an 10 |
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| 51 | 51 | | adjusted gross income, as defined in 20 U.S.C. § 1070a, of up to ninety 11 |
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| 52 | 52 | | thousand dollars ($90,000); 12 |
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| 53 | 53 | | (3) Is classified as degree - or credential-seeking pursuing a 13 |
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| 54 | 54 | | certificate, associate degree, or bachelor's degree; 14 |
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| 55 | 55 | | (4) Initially enrolled in the public two -year or four-year 15 |
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| 56 | 56 | | institution of higher education for which the income tax credit is claimed 16 |
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| 57 | 57 | | within two (2) years of graduating from high school or obtaining a high 17 |
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| 58 | 58 | | school equivalency diploma; 18 |
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| 59 | 59 | | (5) Has accumulated fewer than sixty -five (65) credit hours 19 |
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| 60 | 60 | | prior to the first semester attended at the public two -year or four-year 20 |
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| 61 | 61 | | institution of higher education for which the income tax credit is claimed; 21 |
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| 62 | 62 | | (6) Has completed at least six (6) credit hours at the end of 22 |
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| 63 | 63 | | each semester for which the income tax credit is claimed; and 23 |
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| 64 | 64 | | (7) Has maintained a grade point average of at least 2.5 on a 24 |
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| 65 | 65 | | 4.0 scale for each semester for which the tax credit is claimed; 25 |
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| 66 | 66 | | (e) The income tax credit allowed by this section may be claimed for 26 |
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| 67 | 67 | | no more than four (4) consecutive academic semesters. 27 |
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| 68 | 68 | | (f) If the amount of the income tax credit allowed under this section 28 |
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| 69 | 69 | | exceeds the taxpayer's income tax liability, the excess shall be refunded to 29 |
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| 70 | 70 | | the taxpayer. 30 |
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| 71 | 71 | | 31 |
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| 72 | 72 | | SECTION 2. EFFECTIVE DATE. Section 1 of this act is effective for tax 32 |
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| 73 | 73 | | years beginning on or after January 1, 2025. 33 |
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| 74 | 74 | | 34 |
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| 75 | 75 | | 35 |
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| 76 | 76 | | 36 |
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