Chapter 867 Oregon Laws 2001

 

AN ACT

 

HB 2716

 

Relating to taxation; creating new provisions; amending ORS 315.262; and appropriating money.

 

Be It Enacted by the People of the State of Oregon:

 

          SECTION 1. ORS 315.262 is amended to read:

          315.262. (1) As used in this section:

          (a) “Child care” means care provided to a qualifying child of the taxpayer for the purpose of allowing the taxpayer to be gainfully employed, to seek employment or to attend school on a full-time or part-time basis, except that the term does not include care provided by:

          (A) The child’s parent or guardian, unless the care is provided by the parent in a licensed or registered child care facility; or

          (B) A child of the taxpayer who has not yet attained 19 years of age at the close of the tax year.

          (b) “Child care expenses” means the costs associated with providing child care to a qualifying child of a qualified taxpayer.

          (c) “Earned income” has the meaning given that term in section 32 of the Internal Revenue Code.

          (d) “Qualified taxpayer” means a taxpayer:

          (A) With at least $6,000 of earned income for the tax year;

          (B) With federal adjusted gross income for the tax year that does not exceed 250 percent of the federal poverty level; and

          (C) Who does not have more than the maximum amount of disqualified income under section 32(i) of the Internal Revenue Code that is allowed to a taxpayer entitled to the earned income tax credit for federal tax purposes.

          (e) “Qualifying child” means a child of the taxpayer who is under 13 years of age, or who is a disabled child, as that term is defined in ORS 316.099.

          (2) A qualified taxpayer shall be allowed a credit against the taxes otherwise due under ORS chapter 316 equal to the applicable percentage of the qualified taxpayer’s child care expenses (rounded to the nearest $50).

          (3) The applicable percentage to be used in calculating the amount of the credit provided in this section shall be determined in accordance with the following table:

______________________________________________________________________________

 

Applicable         Federal Adjusted

Percentage         Gross Income as Percent

                          of Federal Poverty Level

 

      40                 200 or less

      36                 Greater than 200 and less than

                            or equal to 210

      32                 Greater than 210 and less than

                            or equal to 220

      24                 Greater than 220 and less than

                            or equal to 230

      16                 Greater than 230 and less than

                            or equal to 240

      8                   Greater than 240 and less than

                            or equal to 250

      0                   Greater than 250 percent

                            of federal poverty level

 

______________________________________________________________________________

 

          (4) The credit shall be claimed on such form and containing such information as may be prescribed by the Department of Revenue.

          (5) In the case of a credit allowed under this section:

          (a) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117.

          (b) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.

          (c) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed under this section shall be prorated or computed in a manner consistent with ORS 314.085.

          (d) In the case of a qualified taxpayer who is married, a credit shall be allowed under this section only if:

          (A) The taxpayer files a joint return;

          (B) The taxpayer files a separate return and is legally separated or subject to a separate maintenance agreement; or

          (C) The taxpayer files a separate return and the taxpayer and the taxpayer’s spouse reside in separate households on the last day of the tax year with the intent of remaining in separate households in the future.

          (6)(a) [The credit allowed under this section shall not exceed the tax liability of the taxpayer and may not be carried forward to a succeeding tax year.] If the amount allowable as a credit under this section, when added to the sum of the amounts allowable as payment of tax under ORS 316.187 (withholding), ORS 316.583 (estimated tax), other tax prepayment amounts and other refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year (reduced by any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax year), the amount of the excess shall be refunded to the taxpayer as provided in this subsection.

          (b) Except that refunds attributable to the child care tax credit shall be made from the moneys transferred under paragraph (c) of this subsection, any refund described in paragraph (a) of this subsection shall be paid from the Department of Revenue suspense account established under ORS 293.445.

          (c) Moneys necessary to make refunds attributable to the child care tax credit shall be transferred from and are continuously appropriated from the General Fund to the Department of Revenue suspense account established under ORS 293.445 for the purpose of making the refunds required under this section.

          (7)(a) For tax years beginning on or after January 1, 1999, the minimum amount of earned income a taxpayer must earn in order to be a qualified taxpayer shall be adjusted by multiplying $6,000 by the ratio of the U.S. City Average Consumer Price Index for the average of the monthly indexes for the second quarter of the calendar year over the average of the monthly indexes of the second quarter of the calendar year 1998.

          (b) As used in this subsection, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

          (c) If any adjustment determined under paragraph (a) of this subsection is not a multiple of $50, the adjustment shall be rounded to the nearest multiple of $50.

          (d) Notwithstanding paragraphs (a) to (c) of this subsection, the adjusted minimum amount of earned income a taxpayer must earn may not exceed the amount an individual would earn if the individual worked 1,040 hours at the minimum wage established under ORS 653.025 and in effect on January 1 of the calendar year in which begins the tax year of the taxpayer, rounded to the next lower multiple of $50.

 

          SECTION 2. The amendments to ORS 315.262 by section 1 of this 2001 Act apply to tax years beginning on or after January 1, 2003.

 

          SECTION 3. The amendments to ORS 315.262 by section 1 of this 2001 Act do not become operative unless House Bill 2281 (modifying the apportionment of business income for income and corporate excise tax purposes) takes effect prior to January 1, 2003.

 

Approved by the Governor July 30, 2001

 

Filed in the office of Secretary of State July 30, 2001

 

Effective date January 1, 2002

__________