Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H2762 Compare Versions

Only one version of the bill is available at this time.

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2	2	HOUSE DOCKET, NO. 3457 FILED ON: 1/20/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 2762
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Marjorie C. Decker and Andres X. Vargas
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act to increase family stabilization through the earned income tax credit.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Marjorie C. Decker25th Middlesex1/11/2023Andres X. Vargas3rd Essex1/20/2023Bud L. Williams11th Hampden1/20/2023Lindsay N. Sabadosa1st Hampshire1/20/2023Sean Garballey23rd Middlesex1/20/2023Joanne M. ComerfordHampshire, Franklin and Worcester1/24/2023David Henry Argosky LeBoeuf17th Worcester1/25/2023Michael D. BradySecond Plymouth and Norfolk1/26/2023Sal N. DiDomenicoMiddlesex and Suffolk1/27/2023Christine P. Barber34th Middlesex1/30/2023Natalie M. Blais1st Franklin1/30/2023Steven Ultrino33rd Middlesex2/3/2023Jon Santiago9th Suffolk2/6/2023Patricia A. Duffy5th Hampden2/8/2023James C. Arena-DeRosa8th Middlesex2/8/2023Natalie M. Higgins4th Worcester2/9/2023Tram T. Nguyen18th Essex2/10/2023Adam Scanlon14th Bristol2/14/2023 2 of 2
16	16	Mindy Domb3rd Hampshire2/15/2023Priscila S. Sousa6th Middlesex2/23/2023Samantha Montaño15th Suffolk2/23/2023David Paul Linsky5th Middlesex3/2/2023James B. EldridgeMiddlesex and Worcester3/11/2023 1 of 6
17	17	HOUSE DOCKET, NO. 3457 FILED ON: 1/20/2023
18	18	HOUSE . . . . . . . . . . . . . . . No. 2762
19	19	By Representatives Decker of Cambridge and Vargas of Haverhill, a petition (accompanied by
20	20	bill, House, No. 2762) of Marjorie C. Decker, Andres X. Vargas and others relative to the earned
21	21	income tax credit. Revenue.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE HOUSE, NO. 2871 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act to increase family stabilization through the earned income tax credit.
30	30	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
31	31	of the same, as follows:
32	32	1 SECTION 1. Section 6 of chapter 62 of the General Laws is hereby amended by striking
33	33	2out subsection (h) and inserting in its place the following subsection:--
34	34	3 (1) For purposes of this subsection, the following definitions apply:
35	35	4 “Adjusted gross income” has the meaning given in section 62 of the Code.
36	36	5 “Earned income” has the meaning given in section 32(c) of the Code.
37	37	6 “Eligible claimant” means an eligible individual, or eligible student. 2 of 6
38	38	7 “Eligible individual” has the meaning given in section 32(c)(1) of the Code, except that
39	39	8“age 18” is substituted for “age 25” and “but not attained age 65” is disregarded in section
40	40	932(c)(1)(A)(ii)(II).
41	41	10 “Eligible student” means an individual who:
42	42	11 (i) is enrolled at an institution of higher education;
43	43	12 (ii) is enrolled for at least one-half the normal full-time work load for the course of study
44	44	13that the student is pursuing, as indicated on the student’s Internal Revenue Service form 1098-T;
45	45	14 (iii) is enrolled in a course of study necessary for enrollment in a program leading to a
46	46	15degree or certificate; and
47	47	16 (iv) is not claimed as a dependent as defined in section 152(a) of the Code for the taxable
48	48	17year.
49	49	18 “Federal credit percentage” means the earned income credit percentage determined in
50	50	19section 32(b)(1) of the Code; provided, however, that for each additional qualifying child above
51	51	203 children, the guaranteed minimum income credit percentage shall increase by 5 basis points per
52	52	21qualifying child.
53	53	22 “Federal match” by the Commonwealth equals 50 percent.
54	54	23 “Federal phaseout amount” means the phaseout amount determined in section 32(b)(2) of
55	55	24the Code and adjusted for inflation pursuant to section 32(j) of the Code.
56	56	25 “Initial rate” means the federal credit percentage for eligible claimants with one
57	57	26qualifying child in section 32(b) of the Code multiplied by the federal match. 3 of 6
58	58	27 “Maximum earned income” means an amount equal at the time of enactment to $75,000.
59	59	28For each taxable year commencing on and after January 1, 2024, the maximum earned income
60	60	29shall be adjusted annually for inflation at a rate equal to the cost-of-living adjustment determined
61	61	30under section 1(f)(3) of the Code.
62	62	31 “Phaseout rate” equals 4.8 percent.
63	63	32 “Qualifying child” has the meaning given in section 32(c) of the Code.
64	64	33 “Qualifying relative” has the meaning given in section 152(d) of the Code.
65	65	34 “State phaseout amount” means an amount equal to the maximum earned income minus
66	66	35the quotient of the basic credit divided by the phaseout rate.
67	67	36 “Taxable income” has the meaning given in section 63 of the Code.
68	68	37 (2) (i)An individual may, based upon this subsection, receive an earned income credit
69	69	38against the tax imposed under this chapter. To receive an earned income credit, an individual
70	70	39must be an eligible individual, except that an individual may also receive an earned income
71	71	40credit if the individual:
72	72	41 (A) is an eligible student; or
73	73	42 (B) has an earned income or a federal adjusted gross income that is greater than the
74	74	43maximum earned income amount allowed for the earned income credit under section 32 of the
75	75	44Code but does not exceed the maximum earned income as defined in this subsection.
76	76	45 (ii) For an individual who has no qualifying child: 4 of 6
77	77	46 (B) for an earned income less than the maximum earned income, the earned income
78	78	47credit equals the basic credit; except that the guaranteed minimum income credit is reduced by
79	79	48the earned income, or if greater, federal adjusted gross income, in excess of the state phaseout
80	80	49amount multiplied by the phaseout rate.
81	81	50 (iii) for an individual who has one or more qualifying children:
82	82	51 (B) for an earned income less than the maximum earned income and greater than the
83	83	52federal phaseout amount, the amount of the earned income credit is equal to the federal match
84	84	53multiplied by the corresponding credit under section 32 of the Code; except that the earned
85	85	54income credit is reduced by the product of the earned income, or if greater, federal adjusted gross
86	86	55income, in excess of the state phaseout amount multiplied by the phaseout rate.
87	87	56 (3) If other credits allowed under this section are utilized by the taxpayer for the taxable
88	88	57year, the earned income credit afforded by this subsection shall be applied last. If the amount of
89	89	58the guaranteed minimum income credit allowed under this subsection exceeds the taxpayer's
90	90	59liability, the commissioner shall treat the excess as an overpayment and shall pay the taxpayer
91	91	60the amount of the excess without interest.
92	92	61 (4) With respect to a person who is a nonresident for part of the taxable year, the
93	93	62allowable earned income credit shall be the earned income credit as calculated in clause (2)
94	94	63multiplied by a fraction, the numerator of which shall be the number of days in the taxable year
95	95	64the person resided in the commonwealth and the denominator of which shall be the number of
96	96	65days in the taxable year. A person who is a nonresident for the entire taxable year shall not be
97	97	66allowed the earned income credit. 5 of 6
98	98	67 (5) For the purposes of this subsection, a married taxpayer shall satisfy the joint filing
99	99	68requirement under section 32 of the Code if the taxpayer files an income tax return using a filing
100	100	69status of married filing separately and the taxpayer: (i) is living apart from the taxpayer’s spouse
101	101	70at the time the taxpayer files the tax return; (ii) is unable to file a joint return because the
102	102	71taxpayer is a victim of domestic abuse; and (iii) indicates on the taxpayer’s income tax return
103	103	72that the taxpayer meets the criteria of clauses (i) and (ii).
104	104	73 (6) For the purposes of this subsection, a taxpayer may claim an earned income credit
105	105	74under this section, using either a Social Security number or an individual taxpayer identification
106	106	75number, if but for section 32(m) of the Code, the taxpayer would be eligible to claim a
107	107	76guaranteed minimum income credit.
108	108	77 (8) In order to ensure the widest possible dissemination of the state and federal earned
109	109	78income credit, the department shall: (i) include multilingual information by video and text in its
110	110	79website about the guaranteed minimum income credit, free tax preparation services, and low-
111	111	80income taxpayer clinics; (ii) provide all employers with a multilingual poster and a notice that
112	112	81sets forth the rights to the guaranteed minimum income credit under this chapter; (iii) require
113	113	82that all employers doing business in the commonwealth post information about the guaranteed
114	114	83minimum income credit in a conspicuous location at the place of employment; (iv) coordinate a
115	115	84notification system by the commonwealth about the guaranteed minimum income credit to
116	116	85applicants for and recipients of unemployment insurance under chapter 151A, applicants for and
117	117	86recipients of transitional assistance benefits, including food stamps, under chapter 18, and to
118	118	87recipients of subsidized health insurance under chapter 118E; and (v) collaborate with labor
119	119	88organizations, chambers of commerce, municipalities, community-based organizations, and
120	120	89taxpayer advocates to disseminate information about the guaranteed minimum income credit. 6 of 6
121	121	90The multilingual poster and notice requirement in clause (i) shall comply with the requirements
122	122	91for employer’s unemployment notices under clauses (i) and (iii) of subsection (d) of section 62A
123	123	92of chapter 151A.
124	124	93 SECTION 2. Section 1 of this act shall apply to tax years beginning on or after January 1,
125	125	942022.