Louisiana House Bill HB61

Louisiana 2021 Regular Session

• Introduced: 3/4/21
• Refer: 3/4/21
• Refer: 4/12/21

Caption

Requires taxpayers claiming the earned income tax credit to provide certain residency information regarding dependents (OR SEE FISC NOTE GF RV)

Impact

The implementation of HB 61 will modify the existing regulations surrounding the earned income tax credit by introducing stricter verification processes for dependents. The bill retains the state individual income tax credit, which allows taxpayers to claim 5% of their federal earned income tax credit through 2025, but now includes additional residency verification. Taxpayers claiming a dependent will need to establish that the dependent has maintained a physical presence in the U.S. for a stipulated duration, thereby aligning the state’s tax code more closely with federal requirements or expectations.

Summary

House Bill 61, introduced by Representative Hodges, mandates that taxpayers seeking the earned income tax credit must confirm their qualifying dependents meet certain residency criteria. This bill adds an additional layer of verification, requiring taxpayers to submit a statement attesting that a qualifying child has been physically present in the United States for at least six months during the taxable year. This requirement serves to ensure that tax credits are only extended to those who have verifiable local ties, thereby potentially reducing fraudulent claims in the taxation system.

Sentiment

Overall sentiment regarding HB 61 appears to be mixed. Proponents argue that this bill is a necessary step to eliminate fraudulent claims and ensure that benefits are directed toward legitimate residents. They contend that clear residency requirements will enhance the integrity of the tax credit system. Conversely, critics may view these stringent verification requirements as potentially burdensome to taxpayers, especially those who may have varied living circumstances, thereby complicating the process of claiming tax credits and possibly discouraging eligible families from applying.

Contention

One notable point of contention surrounding this bill is the potential impact on low-income families who may rely heavily on the earned income tax credit as a financial lifeline. Critics argue that imposing residency requirements could unintentionally penalize families with dependents who travel or those in transitional living situations. Furthermore, there could be apprehensions about how these requirements will be enforced and the administrative burden it might place on the Department of Revenue, which is tasked with overseeing these new regulations. Additionally, exempting members of the armed services on active duty stationed outside the state was a consideration to mitigate some concerns, but it may also raise questions about fairness and consistency in the enforcement of these requirements.