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House Engrossed |
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State of Arizona House of Representatives Fifty-third Legislature Second Regular Session 2018
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HOUSE BILL 2459 |
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AN ACT
Amending section 43-222, Arizona Revised Statutes; amending title 43, chapter 10, article 5, Arizona Revised Statutes, by adding section 43‑1075; relating to individual income tax credits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-222, Arizona Revised Statutes, is amended to read:
43-222. Income tax credit review schedule
The joint legislative income tax credit review committee shall review the following income tax credits:
1. For years ending in 0 and 5, sections 43‑1079.01, 43‑1087, 43‑1088, 43-1089.04, 43‑1167.01 and 43‑1175.
2. For years ending in 1 and 6, sections 43‑1074.02, 43‑1083, 43‑1083.02, 43‑1164.03 and 43‑1183.
3. For years ending in 2 and 7, sections 43‑1073, 43‑1080, 43‑1085, 43‑1086, 43‑1089, 43‑1089.01, 43‑1089.02, 43-1089.03, 43‑1164, 43‑1169 and 43‑1181.
4. For years ending in 3 and 8, sections 43‑1074.01, 43-1075, 43‑1081, 43‑1168, 43‑1170 and 43‑1178.
5. For years ending in 4 and 9, sections 43‑1076, 43‑1081.01, 43‑1083.04, 43‑1084, 43‑1162, 43‑1164.05, 43‑1170.01 and 43-1184 and, beginning in 2019, sections 43‑1083.03 and 43‑1164.04.
Sec. 2. Title 43, chapter 10, article 5, Arizona Revised Statutes, is amended by adding section 43-1075, to read:
43-1075. Child tax credit; definition
A. For taxable years beginning from and after December 31, 2018, a credit is allowed against the taxes imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer for whom the taxpayer is allowed an exemption as a dependent under section 43‑1023, subsection B, paragraph 1.
B. The amount of the credit allowed for each qualifying child is two hundred fifty dollars, except that if the taxpayer's Arizona adjusted gross income exceeds a threshold amount, as determined under paragraph 2 of this subsection, the total amount of the credit is reduced by five percent for each one thousand dollars or fraction of one thousand dollars by which the taxpayer's Arizona adjusted gross income exceeds the threshold amount. For the purposes of this subsection:
1. "Federal poverty level" means the poverty levels that are set and reported annually in the federal poverty guidelines as defined in section 1‑215.
2. "Threshold amount" means:
(a) For a husband and wife filing a joint return, two hundred percent of the federal poverty level for a family that includes the taxpayer, the taxpayer's spouse and each qualifying child of the taxpayer.
(b) For a taxpayer filing as a single individual or head of household, 136.4 percent of the federal poverty level for a family that includes the taxpayer and each qualifying child of the taxpayer.
(c) For a married taxpayer filing a separate return, one hundred percent of the federal poverty level for a family that includes the taxpayer and each qualifying child of the taxpayer.
C. For the purposes of this section:
1. If a child can be claimed as a qualifying child by more than one taxpayer, the child shall be treated as a qualifying child by the taxpayer who is the child's parent, or if not a parent, the taxpayer with the highest Arizona adjusted gross income for the taxable year.
2. If more than one parent claims a qualifying child and the parents do not file a joint return together, the child shall be treated as the qualifying child of the parent with whom the child resided for the longest period of time during the taxable year. If the child resided with each parent equally, the child shall be treated as the qualifying child of the parent with the highest Arizona adjusted gross income for the taxable year.
3. If two or more taxpayers claim a qualifying child and cannot agree who will claim the credit or if two or more taxpayers file tax returns claiming a credit for the same person, the department shall deny the credit for all claimants until they resolve the issue in a court of competent jurisdiction.
D. The credit allowed under this section may not reduce the taxpayer's tax liability below zero. If the amount of the credit exceeds the amount of taxes due, or if there are no taxes due under this chapter for the taxable year, the unused amount of the credit terminates and is not refundable or subject to carryover.
E. A credit is not allowed and the department shall deny a credit that is claimed under this section if the taxpayer is delinquent in court‑ordered payments for spousal maintenance or for support of any child.
F. For the purposes of this section, "qualifying child" means a child who meets all of the following requirements:
1. Is the taxpayer's son, daughter, stepchild, foster child, sibling, stepbrother or stepsister or a descendant of any of them or any of the listed relatives by the half-blood or by adoption.
2. Was under seventeen years of age at the end of the taxable year.
3. Did not provide more than one-half of the child's own support for the taxable year.
4. Lived with the taxpayer in this state for more than one-half of the taxable year.
5. Is claimed as a dependent on the taxpayer's resident or part‑year resident tax return.
6. Does not file a joint return for the taxable year or files it only to claim a refund of withheld income tax or estimated tax.
7. Was a United States citizen, a United States national or a United States resident alien during the taxable year.
Sec. 3. Purpose
Pursuant to section 43-223, Arizona Revised Statutes, the child tax credit enacted in section 43-1075, Arizona Revised Statutes, as added by this act, is intended to mitigate the many household expenses of raising children.