GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	2 

HOUSE BILL 2
Second Edition Engrossed 2/13/95

Short Title:  Income Tax Cut/Child Credit.	(Public)

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Sponsors: Representatives Daughtry, Gray, Arnold, Hayes, Russell, Brawley, Cansler, McComas, C. Wilson; Aldridge, Bowie, Buchanan, Capps, Church, Clary, Cocklereece, Culp, Davis, Decker, Dockham, Edwards, Gardner, Holmes, Lemmond, McMahan, K. Miller, Morgan, Neely, Nichols, Pate, Preston, Pulley, Rayfield, Reynolds, Sexton, Sharpe, Shubert, Snowden, Tallent, Thompson, Warner, Weatherly, and Wood.

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Referred to:  Finance.

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January 26, 1995

A BILL TO BE ENTITLED
AN ACT TO REDUCE INCOME TAXES FOR THE WORKING PEOPLE OF NORTH CAROLINA BY INCREASING THE PERSONAL EXEMPTION DEDUCTION BY FIVE HUNDRED DOLLARS AND BY ALLOWING A TAX CREDIT OF FIFTY DOLLARS PER DEPENDENT CHILD.
The General Assembly of North Carolina enacts:
Section 1. (a) Effective for taxable years beginning on or after January 1, 1995, G.S. 105-134.6(c)(4) reads as rewritten:
"(4)	The amount by which the taxpayer's standard deduction has been increased for inflation under section 63(c)(4) of the Code and the amount by which each of the taxpayer's personal exemptions has been increased for inflation above two thousand two hundred fifty dollars ($2,250) under section 151(d)(4)(A) of the Code. For the purpose of this subdivision, if the taxpayer's personal exemptions have been reduced by the applicable percentage under section 151(d)(3) of the Code, the amount by which each of the personal exemptions has been increased for inflation over two thousand two hundred fifty dollars ($2,250) is also reduced by the applicable percentage."
(b)	Effective for taxable years beginning on or after January 1, 1996, G.S. 105-134.6(c)(4), as amended by subsection (a) of this section, reads as rewritten:
"(4)	The amount by which the taxpayer's standard deduction has been increased for inflation under section 63(c)(4) of the Code and the amount by which each of the taxpayer's personal exemptions has been increased for inflation above two thousand five hundred dollars ($2,500) under section 151(d)(4)(A) of the Code. For the purpose of this subdivision, if the taxpayer's personal exemptions have been reduced by the applicable percentage under section 151(d)(3) of the Code, the amount by which each of the personal exemptions has been increased for inflation over two thousand five hundred dollars ($2,500) is also reduced by the applicable percentage."
Sec. 2.  Division II of Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-151.24.  Credit for children.
An individual is allowed as a credit against the tax imposed by this Division an amount equal to fifty dollars ($50.00) for each dependent child for whom the individual was allowed to deduct a personal exemption under section 151(c)(1)(B) of the Code for the taxable year.  A nonresident or part-year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105-134.5(b) or (c), as appropriate.  The credit allowed under this section may not exceed the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer."
Sec. 3.  Section 1(a) of this act is effective for taxable years beginning on or after January 1, 1995; Section 1(b) of this act is effective for taxable years beginning on or after January 1, 1996; the remainder of this act is effective for taxable years beginning on or after January 1, 1995.