An Act Regarding the State Earned Income Tax Credit
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 36 MRSA §5219-S, as repealed and replaced by PL 2007, c. 693, §31, is amended to read:
§ 5219-S. Earned income credit
1. Resident taxpayer. A resident individual is allowed a credit against the tax otherwise due under this Part in the amount of 5% 25% of the federal earned income credit for the same taxable year.
2. Nonresident taxpayer. A nonresident individual is allowed a credit against the tax otherwise due under this Part in the amount of 5% 25% of the federal earned income credit for the same taxable year multiplied by the ratio of the individual's Maine adjusted gross income, as defined in section 5102, subsection 1-C, paragraph B, to the individual's entire federal adjusted gross income, as modified by section 5122.
3. Part-year resident taxpayer. An individual who files a return as a part-year resident in accordance with section 5224-A is allowed a credit against the tax otherwise due under this Part in the amount of 5% 25% of the federal earned income credit for the same taxable year multiplied by a ratio, the numerator of which is the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph A for that portion of the taxable year during which the individual was a resident plus the individual's Maine adjusted gross income as defined in section 5102, subsection 1-C, paragraph B for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire federal adjusted gross income, as modified by section 5122.
4. Limitation. The credit allowed by this section may not reduce the Maine income tax to less than zero is fully refundable.
§5219-S. Credit for consumption of wood processing residue
(As enacted by PL1999, c. 755, §1 is REALLOCATED TO TITLE 36, SECTION 5219-T)
SUMMARY
This bill increases the state earned income credit from 5% to 25% of the federal credit and provides that the state earned income credit is fully refundable.