Sales tax fairness credit

# 1.

Definitions.
As used in this section, unless the context otherwise indicates, the following terms have the following meanings.
A.
For tax years beginning before January 1, 2018, "base credit" means:

# (1)

For an individual income tax return claiming one personal exemption, $100 for tax years beginning in 2016 and $125 for tax years beginning on or after January 1, 2017;

# (2)

For an individual income tax return claiming 2 personal exemptions, $140 for tax years beginning in 2016 and $175 for tax years beginning on or after January 1, 2017;

# (3)

For an individual income tax return claiming 3 personal exemptions, $160 for tax years beginning in 2016 and $200 for tax years beginning on or after January 1, 2017; and

# (4)

For an individual income tax return claiming 4 or more personal exemptions, $180 for tax years beginning in 2016 and $225 for tax years beginning on or after January 1, 2017.
For the purposes of this paragraph, personal exemption does not include a personal exemption for an individual who is incarcerated.
A-1.
For tax years beginning on or after January 1, 2018, "base credit" means:

(1)
For single individuals, $125;

(2)
For individuals filing joint returns or as heads of households, $175 plus an additional amount equal to:

(a)
For individuals filing joint returns, $25 if they can claim the federal child tax credit pursuant to the Code, Section 24 for no more than one qualifying child or dependent or $50 if they can claim the credit for more than one qualifying child or dependent; or

(b)
For individuals filing as heads of households, $25 if they can claim the federal child tax credit pursuant to the Code, Section 24 for 2 qualifying children or dependents or $50 if they can claim the credit for more than 2 qualifying children or dependents.
B.
"Income" means federal adjusted gross income increased by the following amounts:

(1)
Trade or business losses; capital losses; any net loss resulting from combining the income or loss from rental real estate and royalties, the income or loss from partnerships and S corporations, the income or loss from estates and trusts, the income or loss from real estate mortgage investment conduits and the net farm rental income or loss; any loss associated with the sale of business property; and farm losses included in federal adjusted gross income;

(2)
Interest received to the extent not included in federal adjusted gross income;

(3)
Payments received under the federal Social Security Act and railroad retirement benefits to the extent not included in federal adjusted gross income; and

(4)
The following amounts deducted in arriving at federal adjusted gross income:

(a)
Educator expenses pursuant to the Code, Section 62(a)(2)(D);

(b)
Certain business expenses of performing artists pursuant to the Code, Section 62(a)(2)(B);

(c)
Certain business expenses of government officials pursuant to the Code, Section 62(a)(2)(C);

(d)
Certain business expenses of reservists pursuant to the Code, Section 62(a)(2)(E);

(e)
Health savings account deductions pursuant to the Code, Section 62(a)(16) and Section 62(a)(19);

(f)
Moving expenses pursuant to the Code, Section 62(a)(15);

(g)
The deductible part of self-employment tax pursuant to the Code, Section 164(f);

(h)
The deduction for self-employed SEP, SIMPLE and qualified plans pursuant to the Code, Section 62(a)(6);

(i)
The self-employed health insurance deduction pursuant to the Code, Section 162(l);

(j)
The penalty for early withdrawal of savings pursuant to the Code, Section 62(a)(9);

(k)
Alimony paid pursuant to the Code, Section 62(a)(10);

(l)
The IRA deduction pursuant to the Code, Section 62(a)(7);

(m)
The student loan interest deduction pursuant to the Code, Section 62(a)(17); and

(n)
The tuition and fees deduction pursuant to the Code, Section 62(a)(18).

# 2.

Credit for resident taxpayer.
A resident individual is allowed a credit equal to the applicable base credit amount, subject to the phase-out provisions under subsection 4 .

# 3.

Credit for part-year resident taxpayer.
A taxpayer who files a return as a part-year resident in accordance with section 5224‑A is allowed a credit equal to the applicable base credit amount, subject to the phase-out provisions under subsection 4 , multiplied by a ratio, the numerator of which is the individual's income as modified by section 5122 for that portion of the taxable year during which the individual was a resident plus the individual's income from sources within this State, as determined under section 5142 , for that portion of the taxable year during which the individual was a nonresident and the denominator of which is the individual's entire income, as modified by section 5122 .

# 4.

Phase-out of credit.
The credit allowed under this section is phased out as follows.

# A.

For single individuals, the credit is reduced by $10 for every $500 or portion thereof that exceeds $20,000 of the income.

# B.

For unmarried individuals or legally separated individuals who qualify as heads of households, the credit is reduced by $15 for every $750 or portion thereof that exceeds $30,000 of the income.

# C.

For individuals filing married joint returns or surviving spouses permitted to file joint returns, the credit is reduced by $20 for every $1,000 or portion thereof that exceeds $40,000 of the income.

# 5.

Refundability of credit.
The tax credit allowed under this section is refundable.

# 6.

Limitations.
The following individuals do not qualify for the credit under this section:

# A.

Married taxpayers filing separate returns;

# B.

Individuals who do not qualify as resident individuals because they do not meet the requirements of section 5102, subsection 5, paragraph A ; or C.
Individuals who may be claimed as a dependent on another taxpayer's return.