ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature Second Regular Session
	Senate: FIN DPA 8-2-0-0 | 3^rd Read 21-7-2-0 House: APPROP DP 9-3-0-1 | 3^rd Read 33-17-10-0

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SB 1222: exempt property; tax credit; proceeds

Sponsor: Senator Bowie, LD 18

Transmitted to Governor

Overview

Exempts refunded monies from the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) from being collected from a debtor.

History

Statute outlines personal property exemptions for the bankruptcy process and other debt collection actions against a debtor (A.R.S. Title 33, Chapter 8, Article 2).

The federal EITC is a tax credit for low- and moderate-income taxpayers that provides a refundable tax credit against taxpayers' income tax liability. The amount of the EITC depends on a taxpayer's adjusted gross income, marital status and number of children. As a refundable tax credit, if the EITC exceeds a taxpayer's income tax liability, the federal Internal Revenue Service refunds the balance to the taxpayer (26 U.S.C. § 32).

The federal CTC is a tax credit for low- and moderate-income taxpayers with eligible children that provides a partially refundable tax credit against taxpayers' income tax liability. The maximum amount of the CTC is $2,000 per eligible child; the refundable portion of the CTC is $1,400 per child (26 U.S.C. § 24).

Provisions

1. Exempts, from execution, attachment, sale or any other remedy for the collection of debts:

a) the refundable portion of any state or federal EITC; and

b) the additional refundable portion of any state or federal CTC. (Sec. 1)

2. Specifies that the exempt amount is the lesser of the total combined amount of:

a) federal and state tax refunds; or

b) any federal or state EITC and CTC claimed on the tax return. (Sec. 1)

3. Makes technical changes. (Sec. 1)

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                        SB 1222

Initials AF/NM Page 0 Transmitted

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