GENERAL ASSEMBLY OF NORTH CAROLINA

SECOND EXTRA SESSION 1996

H	1 

HOUSE BILL 30

Short Title:  Refund Federal Retirees.	(Public)

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Sponsors: Representatives Grady, Morgan; H. Hunter, Hurley, McComas, Nichols, Preston, and Tolson.

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Referred to:  Rules, Calendar and Operations of the House.

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July 9, 1996

A BILL TO BE ENTITLED
AN ACT TO PROVIDE FEDERAL RETIREES A REFUNDABLE TAX CREDIT, WITHOUT INTEREST, FOR STATE INCOME TAX PAID ON THEIR RETIREMENT BENEFITS FOR TAX YEARS 1985 THROUGH 1988.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-151.20 reads as rewritten:
"§ 105-151.20.  Refundable credit for tax paid on certain federal retirement benefits.
(a)	Purpose; Definitions. – The purpose of this section is to benefit certain retired federal government workers on account of their public service.  The following definitions apply in this section:
(1)	Federal retirement benefits. – Retirement benefits received from one or more federal government retirement plans.
(2)	Net pension tax. – The amount of tax a taxpayer paid under this Division for the 1985, 1986, 1987, and 1988 tax years on federal retirement benefits, without interest, less any part of the tax for which the taxpayer received a credit under this section before 1997 and any part of the tax refunded to the taxpayer before 1997.
(3)	Tax year. – The taxpayer's taxable year beginning on a day in the applicable calendar year.
(b)	Credit. – A taxpayer who received federal retirement benefits during the 1985, 1986, 1987, or 1988 tax year may claim a credit against the tax imposed by this Division equal to the net pension tax on those benefits.  In the case of a taxpayer who is deceased, the surviving spouse may claim the credit in the name of the deceased taxpayer; if there is no surviving spouse, the representative of the taxpayer's estate may claim the credit in the name of the deceased taxpayer.  The 
" " credit allowed under this section shall be taken in equal installments over the taxpayer's first four taxable years beginning on or after January 1, 1997.  In order to claim a credit under this section, a taxpayer must provide any information required by the Secretary to establish the taxpayer's eligibility for credit and the amount of the credit.  
(c)	Credit Refundable. – If an installment of the credit allowed by this section exceeds the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowable, the Secretary shall refund the excess to the taxpayer.  The refundable excess is governed by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed in this Division.  In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits."
Sec. 2.  Effective January 1, 2006, G.S. 105-151.20 is repealed.
Sec. 3.  Section 2 of this act becomes effective January 1, 2006.  The remainder of this act is effective for taxable years beginning on or after January 1, 1997.