Louisiana House Bill HB453

Louisiana 2015 Regular Session

• Introduced: 4/2/15
• Refer: 4/2/15
• Refer: 4/13/15

Caption

Provides for the carry forward rather than the refund of the earned income tax credit

Impact

The primary impact of HB 453 is to adjust how the earned income tax credit functions within Louisiana's tax structure. By eliminating the refund mechanism for excess credits, the bill seeks to reduce potential financial liabilities for the state. Supporters argue that this reform will help stabilize the state's budget by preventing significant outflows from refundable tax credits while still allowing taxpayers to benefit from the credit in future tax years. The measure will apply to tax years starting January 1, 2015, further allowing individuals time to adjust to these new provisions.

Summary

House Bill 453, introduced by Representative Stokes, modifies the structure of the earned income tax credit (EITC) for residents of Louisiana. The bill proposes that individuals eligible for the EITC will no longer receive refunds for any amount of the credit that exceeds their tax liability. Instead, any unused portion of the credit can be carried forward to future tax years for a maximum of five years. This change aims to manage the fiscal implications of the EITC more sustainably while still providing support to taxpayers eligible for the credit.

Sentiment

General sentiment around HB 453 is mixed. Proponents believe that the carry-forward aspect of the credit will encourage fiscal responsibility and provide a safety net for taxpayers needing assistance. Conversely, critics argue that limiting the refund option could disproportionately affect low-income individuals who typically rely on immediate benefits from such credits. The concern lies in how these changes might impact those who are already struggling financially, as they may not have taxable income in future years to benefit from the carry-forward provisions.

Contention

The most notable contention surrounding HB 453 is related to the potential repercussions of replacing a refundable credit with a carry-forward option. Opponents of the bill contend that the change could undermine the effectiveness of the earned income tax credit as a tool for poverty alleviation. This shift could open discussions about equitable support for families and individuals in lower income brackets, inviting further examination of how such tax policies align with broader goals of economic support for vulnerable demographics.