Income tax; modifying calculation of the Oklahoma earned income tax credit. Effective date.
Impact
If enacted, SB307 is designed to provide a more favorable tax treatment for Oklahoma residents utilizing the EITC. The bill stipulates that for tax years from 2022 onwards, those qualifying for the credit will benefit from a calculation method that remains consistent with federal requirements. This change is anticipated to alleviate some financial burdens for taxpayers in the state by ensuring that excess credits can be refunded to them if their tax liability is less than the calculated credit amount.
Summary
Senate Bill 307 is a legislative proposal aimed at modifying the calculation of the Oklahoma earned income tax credit (EITC). This bill amends 68 O.S. 2021, Section 2357.43, which governs the provisions of the EITC for Oklahoma residents. One of the primary changes introduced by SB307 is to apply a five percent (5%) credit based on the earned income tax credit allowable under Section 32 of the Internal Revenue Code. The bill clarifies the calculation of this credit for tax years beginning on or after January 1, 2022.
Contention
While there may not be significant opposition mentioned in the initial discussions, the implementation of SB307 could be subject to scrutiny regarding the financial implications for the state budget. Critics of similar bills in the past have raised concerns about the potential decrease in state revenues, which could affect funding for public services and programs. The precise effects of SB307 on state finances and its long-term sustainability would likely be points of contention among lawmakers and the public.
Additional_points
The bill is set to become effective on November 1, 2023, should it pass through the legislative process. This prompt timeline suggests an urgency in providing tax relief to individuals who qualify for the EITC and reflects broader efforts within the state to enhance economic support for residents.