Chapter 868
AN ACT
HB 2752
Relating to the working family child care tax
credit; creating new provisions; amending ORS 315.262 and 316.502; repealing
ORS 315.262; and prescribing an effective date.
Be It Enacted by the People of
the State of
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 in a certified or registered child
care facility; or
(B) A person who has a
relationship to the taxpayer that is described in section 152(a) of the
Internal Revenue Code 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) “Disability”
means a physical or cognitive condition that results
in a person requiring assistance with activities of daily living.
[(c)] (d) “Earned income” has the meaning given that term in
section 32 of the Internal Revenue Code.
[(d)] (e) “Qualified taxpayer” means
a taxpayer:
(A) Who is an
(B) With federal
adjusted gross income for the tax year that does not exceed 250 percent of the
federal poverty level;
(C) With
(D) 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)] (f) “Qualifying child” has the meaning given that term
in section 152 of the Internal Revenue Code except that it is limited to an
individual who is under 13 years of age, or who is a disabled child, as that
term is defined in ORS 316.099.
(2) A taxpayer is not
disqualified from claiming the credit under this section solely because the
taxpayer’s spouse has a disability, if the disability is such that it prevents
the taxpayer’s spouse from providing child care, being gainfully employed,
seeking employment and attending school. The Department of Revenue may require
that a physician verify the existence of the disability and its severity.
[(2)] (3) 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)] (4) 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 Greater of
Percentage Adjusted Gross Income or
Federal Adjusted
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)] (5) The department [of Revenue] may:
(a) Adopt rules for
carrying out the provisions of this section; and
(b) Prescribe the form used to claim a credit
and the information required on the form. The form may provide for
verification of an individual’s disability by a physician, if applicable, as
described in subsection (2) of this section.
[(5)] (6) 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)] (7) 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 ORS 316.502.
[(7)(a)] (8)(a) The minimum amount
of earned income a taxpayer must earn in order to be a qualified taxpayer shall
be adjusted for tax years beginning in each calendar year by multiplying $6,000
by the ratio of the monthly averaged U.S. City Average Consumer Price Index for
the 12 consecutive months ending August 31 of the prior calendar year over the
monthly averaged index for 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 2007 Act apply to tax years beginning on or after January 1, 2007.
SECTION 3. ORS 315.262 is repealed on January 2, 2014.
SECTION 4. ORS 316.502, as amended by section 4a, chapter
826, Oregon Laws 2005, and section 60, chapter 832, Oregon Laws 2005, is
amended to read:
316.502. (1) The net
revenue from the tax imposed by this chapter, after deducting refunds, shall be
paid over to the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of the State of
Oregon lawfully incurred.
(2) A working balance of
unreceipted revenue from the tax imposed by this chapter may be retained for
the payment of refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are
continuously appropriated to the Department of Revenue to make[:]
[(a)] the refunds authorized under
subsection (2) of this section.[;
and]
[(b) The refund payments in excess of tax
liability authorized under ORS 315.262.]
SECTION 5. The amendments to ORS 316.502 by section 4
of this 2007 Act apply to tax years beginning on or after January 1, 2014.
SECTION 6. If House Bill 3201 becomes law, sections 4
(amending ORS 316.502) and 5 of this 2007 Act are repealed and ORS 316.502, as
amended by section 4a, chapter 826, Oregon Laws 2005, section 60, chapter 832,
Oregon Laws 2005, and section 86, chapter 843, Oregon Laws 2007 (Enrolled House
Bill 3201), is amended to read:
316.502. (1) The net
revenue from the tax imposed by this chapter, after deducting refunds, shall be
paid over to the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of the State of
Oregon lawfully incurred.
(2) A working balance of
unreceipted revenue from the tax imposed by this chapter may be retained for
the payment of refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are
continuously appropriated to the Department of Revenue to make:
(a) The refunds
authorized under subsection (2) of this section; and
(b) The refund payments
in excess of tax liability authorized under [ORS 315.262 and] section 82, chapter 843,
SECTION 6a. If House Bill 3201 becomes law, ORS 316.502,
as amended by section 4a, chapter 826, Oregon Laws 2005, section 60, chapter
832, Oregon Laws 2005, and sections 86 and 87, chapter 843, Oregon Laws 2007
(Enrolled House Bill 3201), is amended to read:
316.502. (1) The net
revenue from the tax imposed by this chapter, after deducting refunds, shall be
paid over to the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of the State of
Oregon lawfully incurred.
(2) A working balance of
unreceipted revenue from the tax imposed by this chapter may be retained for
the payment of refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are
continuously appropriated to the Department of Revenue to make[:]
[(a)] the refunds authorized under subsection
(2) of this section.[; and]
[(b) The refund payments in excess of tax
liability authorized under ORS 315.262.]
SECTION 6b. If House Bill 3201 becomes law:
(1) The amendments to
ORS 316.502 by section 6 of this 2007 Act become operative on January 2, 2014.
(2) The amendments to
ORS 316.502 by section 6a of this 2007 Act become operative on January 2, 2018.
SECTION 6c. If House Bill 3201 becomes law, the
amendments to ORS 316.502 by section 6 of this 2007 Act apply to tax years
beginning on or after January 1, 2014.
SECTION 7. If both House Bill 2735 and House Bill 3201
become law, ORS 316.502, as amended by section 4a, chapter 826, Oregon Laws
2005, section 60, chapter 832, Oregon Laws 2005, and section 20, chapter 906,
Oregon Laws 2007 (Enrolled House Bill 2735), is amended to read:
316.502. (1) The net
revenue from the tax imposed by this chapter, after deducting refunds, shall be
paid over to the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of the State of
Oregon lawfully incurred.
(2) A working balance of
unreceipted revenue from the tax imposed by this chapter may be retained for
the payment of refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are
continuously appropriated to the Department of Revenue to make:
(a) The refunds
authorized under subsection (2) of this section; and
(b) The refund payments
in excess of tax liability authorized under [ORS 315.262 and] section 17, chapter 906,
SECTION 7a. If both House Bill 2735 and House Bill 3201
become law, ORS 316.502, as amended by section 4a, chapter 826, Oregon Laws
2005, section 60, chapter 832, Oregon Laws 2005, and sections 20 and 20a,
chapter 906, Oregon Laws 2007 (Enrolled House Bill 2735), is amended to read:
316.502. (1) The net
revenue from the tax imposed by this chapter, after deducting refunds, shall be
paid over to the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of the State of
Oregon lawfully incurred.
(2) A working balance of
unreceipted revenue from the tax imposed by this chapter may be retained for
the payment of refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are
continuously appropriated to the Department of Revenue to make[:]
[(a)] the refunds authorized under subsection
(2) of this section.[; and]
[(b) The refund payments in excess of tax
liability authorized under ORS 315.262.]
SECTION 7b. If both House Bill 2735 and House Bill 3201
become law:
(1) The amendments to
ORS 316.502 by section 7 of this 2007 Act become operative on January 2, 2014.
(2) The amendments to
ORS 316.502 by section 7a of this 2007 Act become operative on January 2, 2018.
SECTION 7c. If both House Bill 2735 and House Bill 3201
become law, the amendments to ORS 316.502 by section 7 of this 2007 Act apply
to tax years beginning on or after January 1, 2014.
SECTION 8. This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth Legislative
Assembly adjourns sine die.
Approved by the Governor July 31, 2007
Filed in the office of Secretary of State July 31, 2007
Effective date September 27, 2007
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