DOCSLIB.ORG

Tax Reform Act of 2002

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Tax Reform Act of 2002 Filed for intro on 01/31/2002 HOUSE BILL 3046 By Armstrong SENATE BILL 3110 By Cooper J AN ACT to enact the "Tax Reform Act of 2002" and to amend Tennessee Code Annotated, Title 3; Title 4; Title 5; Title 6; Title 7; Title 8; Title 9; Title 12; Title 16; Title 30; Title 36; Title 39; Title 40; Title 45; Title 47; Title 48; Title 55; Title 56; Title 57; Title 61; Title 62; Title 67; Title 68; Title 69; Title 70 and Title 71, relative to taxation. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE: SECTION 1. This act shall be known and may be cited as the "Tax Reform Act of 2002." SECTION 2. (a) Tennessee Code Annotated, Title 67, Chapter 6, Part 3, is amended by deleting in their entirety all sections in such part except for Sections 67-6-322, 67-6-308, 67-6-337 and 67-6-338. (b) Tennessee Code Annotated, Section 67-6-322(c), is amended by designating the existing language of that subsection as subdivision (1) and by adding the following new subdivision: (2) The exemption granted under subsections (a) and (b) shall not apply to any transaction in which both the seller, giver, or donator, and the buyer, recipient, or donee are entities listed under subsection (a) or (b). SB3110 01180430 -1- (c) Tennessee Code Annotated, Title 67, Chapter 6, Part 3, is amended by adding the following new section: Section __. There is exempt from the tax levied by this chapter: (1) Any sale or use of any article, manufactured of the produce of this State exempt from taxation pursuant to Section 30 of Article II of the Constitution of Tennessee; and (2) Any sale or use which would otherwise be taxable pursuant to the provisions of this chapter but which would impose a tax which is invalid either under the commerce clause or the due process clause of the Constitution of the United States. SECTION 3. Tennessee Code Annotated, Section 67-6-102(9), is amended by deleting from the first sentence the language "the retail price of which, for any such single article, exceeds two hundred fifty dollars ($250)," and by deleting from the fourth sentence the language ", the retail price of which exceeds two hundred fifty dollars ($250)". SECTION 4. Tennessee Code Annotated, Section 67-6-102(13)(B), is amended by deleting the language ", the cost of which, for any such single article, exceeds one thousand dollars ($1,000),". SECTION 5. Tennessee Code Annotated, Section 67-6-102(24)(D), is amended by deleting the language "and each sale is in excess of five hundred dollars ($500)" and the language "for sales in excess of five hundred dollars ($500)". SECTION 6. Tennessee Code Annotated, Section 67-6-206, is amended by deleting the section in its entirety. SECTION 7. Tennessee Code Annotated, Section 67-6-207, is amended by deleting the section in its entirety. - 2 - 01180430 SECTION 8. Tennessee Code Annotated, Section 67-6-209(a), is amended by placing a period "." after the words "deductions whatsoever" and by deleting the remainder of the sentence. SECTION 9. Tennessee Code Annotated, Section 67-6-209, is further amended by deleting subsections (d), (e), (f) and (g) in their entirety. SECTION 10. Tennessee Code Annotated, Section 67-6-216, is amended by deleting the section in its entirety. SECTION 11. Tennessee Code Annotated, Section 67-6-217, is amended by deleting the section in its entirety. SECTION 12. Tennessee Code Annotated, Section 67-6-218, is amended by deleting the section in its entirety. SECTION 13. Tennessee Code Annotated, Section 67-6-219, is amended by deleting the section in its entirety. SECTION 14. Tennessee Code Annotated, Section 67-6-224, is amended by deleting the section in its entirety. SECTION 15. Tennessee Code Annotated, Section 67-6-201, is amended by adding a new subdivision, as follows: (__) Provides or engages in one or more of the following services: (11) (A) Accounting and auditing; (B) Amusements; (C) Business services: (i) Advertising, (ii) Building services, (iii) Computer and data processing, (iv) Credit report and collection, (v) Detective and protective services, - 3 - 01180430 (vi) Finance – Securities Brokers, (vii) Insurance agents, (viii) Mail, art reproduction and steno, (ix) Management consulting or public relations, (x) Personnel supply, (xi) Real estate agents, and (xii) Other business services; (D) Construction services; (E) Education, for-profit and nonprofit; (F) Energy: (i) Manufacturing, and (ii) Residential; (G) Engineers, architectural, surveying; (H) Gasoline and diesel fuel; (I) Governmental contracts; (J) Industrial and farm machinery; (K) Legal services; (L) Newspapers and publications; (M) Nonprofit: (i) Health services, (ii) Amusements/member organizations, (iii) Social services, and (iv) Other research, testing, consulting; (N) Nursing and personal care facilities; (O) Other health services; (P) Personal services: - 4 - 01180430 (i) Beauty and barber shops, (ii) Coin-operated laundry, (iii) Funeral, (iv) Veterinary and landscape, and (v) Other; (Q) Physicians, dentists, etc.; (R) Social and other services (day care, etc.); and (S) Transportation services. SECTION 16. Tennessee Code Annotated, Section 67-6-202, is amended by deleting the language "six percent (6%)" in subsection (a) and by substituting instead the language "four and three-fourths percent (4.75%)". SECTION 17. Tennessee Code Annotated, Section 67-6-202, is amended by deleting subsection (b) in its entirety. SECTION 18. Tennessee Code Annotated, Section 67-6-203, is amended by deleting the language "six percent (6%)" in subsection (a) and by substituting instead the language "the tax levied on the sale of tangible personal property at retail by the provisions of §67-6-202". SECTION 19. Tennessee Code Annotated, Section 67-6-203, is amended by deleting subsection (c) in its entirety. SECTION 20. Tennessee Code Annotated, Section 67-6-204, is amended by deleting the language "six percent (6%)" wherever it appears and substituting instead the language "the tax levied on the sale of tangible personal property at retail by the provisions of §67-6-202". SECTION 21. Tennessee Code Annotated, Section 67-6-204, is amended by deleting subsection (d) in its entirety. SECTION 22. Tennessee Code Annotated, Section 67-6-205, is amended by deleting the language "six percent (6%)" in subsection (a) and by substituting instead the language "the tax levied on the sale of tangible personal property at retail by the provisions of §67-6-202". - 5 - 01180430 SECTION 23. Tennessee Code Annotated, Section 67-6-205, is amended by deleting subsection (b) in its entirety. SECTION 24. Tennessee Code Annotated, Section 67-6-205, is amended by adding the following new subsection: (__). Health care service providers shall receive a credit in the amount of fifty percent (50%) of the taxes actually collected by them under this chapter. The remaining fifty percent (50%) of the taxes actually collected by health care service providers shall be deposited in a fund within the general fund for the purpose of making essential access provider payments to hospitals, community mental health centers, and local public health centers in such amounts as may be appropriated in the general appropriations bill. SECTION 25. Tennessee Code Annotated, Section 67-6-221, is amended by deleting the language "six percent (6%)" in subsection (a) and by substituting instead the language "the tax levied on the sale of tangible personal property at retail by the provisions of §67-6-202". SECTION 26. Tennessee Code Annotated, Section 67-6-221, is amended by deleting subsection (b) in its entirety. SECTION 27. Tennessee Code Annotated, Title 67, Chapter 6, Part 2, is amended by adding the following new section: Section __. Notwithstanding any other provision of law to the contrary, a portion of the revenue in an amount equal to one-half percent (0.5%) generated from any sale or use which is taxed at the rate of the tax levied on the sale of tangible personal property at retail by the provisions of §67-6-202 shall continue to be dedicated for education purposes until changed by the general assembly. All revenue generated from such portion of the sales tax rate shall be deposited in the education trust fund and earmarked for education purposes as provided in §49-3-357. - 6 - 01180430 SECTION 28. Tennessee Code Annotated, Title 67, Chapter 6, Part 7, is amended by deleting Section 67-6-701, Section 67-6-702, Section 67-6-703, Section 67-6-704, Section 67-6- 705, Section 67-6-706, Section 67-6-707, Section 67-6-708, Section 67-6-709, Section 67-6- 710, Section 67-6-712, Section 67-6-713, and Section 67-6-714 in their entirety. SECTION 29. Tennessee Code Annotated, Title 67, Chapter 6, Part 7, is amended by adding the following new section: Section _____. (a) Notwithstanding any provision of law to the contrary, subject to the limitations in the formula provided in subsection (b) of this section, a sum shall be earmarked and allocated from the general fund to hold counties and cities harmless from actual or potential loss of revenue resulting from the amendments to Title 67, Chapter 6, Part 7 in the Tax Reform Act of 2002. (b) The sum allocated to each county and city shall be as follows: (1) For the fiscal year ending June 30, 2002, the sum allocated to each such county and city under its local option law, if any, during the fiscal year ending June 30, 2002. (2) For the fiscal year ending June 30, 2003, the sum allocated to each such county and city under subdivision (1) multiplied by a factor of 1.03.
Load more

Recommended publications
  • MAGI 2.0 Part 2: Income Counting
    MAGI 2.0: Building MAGI Knowledge Part 2: Income Counting Last Updated: December 11, 2020 Introduction Setting the Stage 3 . In 2020, the Centers for Medicare and Medicaid Services (CMS) updated a training manual originally developed in 2013 to help states and eligibility workers understand and apply Modified Adjust Gross Income (MAGI)-based rules for Medicaid and the Children’s Health Insurance Program (CHIP). The manual is available at https://www.medicaid.gov/state-resource-center/mac- learning-collaboratives/downloads/household-composition-and-income-training.zip. This MAGI 2.0: Building MAGI Knowledge slide deck serves as a companion to the Household and MAGI Income Training Manual, providing more details on how to apply the MAGI-based income counting rules. The issues and scenarios reviewed in this slide deck were developed in response to frequently asked technical assistance questions raised by states and revised based on updated guidance that was released. Two-Part Resource 4 Determining Household Composition Calculating Household Income Focus of This Resource Determining Household Income 5 Key Questions When Determining Household Income: Whose income is counted? What income is counted? Over what period is income counted? Whose Income Is Counted? 6 Generally, to determine MAGI-based household income: . Count the MAGI-based income of adults in the household. Do not count the MAGI-based income of children in the household. Let’s discuss this rule… Income Counting Rules 7 Regulatory Requirements . Household income includes the Relevant Regulatory Language: MAGI-based income of all 42 CFR 435.603(d)(1) individuals in the MAGI-based Household income is the sum of the MAGI-based income…of every household, with specific individual included in the individual’s household [unless an exception exceptions.
    [Show full text]
  • Chapter 2: What's Fair About Taxes?
    Hoover Classics : Flat Tax hcflat ch2 Mp_35 rev0 page 35 2. What’s Fair about Taxes? economists and politicians of all persuasions agree on three points. One, the federal income tax is not sim- ple. Two, the federal income tax is too costly. Three, the federal income tax is not fair. However, economists and politicians do not agree on a fourth point: What does fair mean when it comes to taxes? This disagree- ment explains, in large measure, why it so difficult to find a replacement for the federal income tax that meets the other goals of simplicity and low cost. In recent years, the issue of fairness has come to overwhelm the other two standards used to evaluate tax systems: cost (efficiency) and simplicity. Recall the 1992 presidential campaign. Candidate Bill Clinton preached that those who “benefited unfairly” in the 1980s [the Tax Reform Act of 1986 reduced the top tax rate on upper-income taxpayers from 50 percent to 28 percent] should pay their “fair share” in the 1990s. What did he mean by such terms as “benefited unfairly” and should pay their “fair share?” Were the 1985 tax rates fair before they were reduced in 1986? Were the Carter 1980 tax rates even fairer before they were reduced by President Reagan in 1981? Were the Eisenhower tax rates fairer still before President Kennedy initiated their reduction? Were the original rates in the first 1913 federal income tax unfair? Were the high rates that prevailed during World Wars I and II fair? Were Andrew Mellon’s tax Hoover Classics : Flat Tax hcflat ch2 Mp_36 rev0 page 36 36 The Flat Tax rate cuts unfair? Are the higher tax rates President Clin- ton signed into law in 1993 the hallmark of a fair tax system, or do rates have to rise to the Carter or Eisen- hower levels to be fair? No aspect of federal income tax policy has been more controversial, or caused more misery, than alle- gations that some individuals and income groups don’t pay their fair share.
    [Show full text]
  • Your Federal Tax Burden Under Current Law and the Fairtax by Ross Korves
    A FairTaxSM White Paper Your federal tax burden under current law and the FairTax by Ross Korves As farmers and ranchers prepare 2006 federal income tax returns or provide income and expense information to accountants and other tax professionals, a logical question is how would the tax burden change under the FairTax? The FairTax would eliminate all individual and corporate income taxes, all payroll taxes and self-employment taxes for Social Security and Medicare, and the estate tax and replace them with a national retail sales tax on final consumption of goods and services. Payroll and self-employment taxes The starting point in calculating the current tax burden is payroll taxes and self-employment taxes. Most people pay more money in payroll and self-employment taxes than they do in income taxes because there are no standard deductions or personal exemptions that apply to payroll and self-employment taxes. You pay tax on the first dollar earned. While employees see only 7.65 percent taken out of their paychecks, the reality is that the entire 15.3 percent payroll tax is part of the cost of having an employee and is a factor in determining how much an employer can afford to pay in wages. Self-employed taxpayers pay both the employer and employee portions of the payroll tax on their earnings, and the entire 15.3 percent on 92.35 percent of their self-employed income (they do not pay on the 7.65 percent of wages that employees do not receive as income); however, they are allowed to deduct the employer share of payroll taxes against the income tax.
    [Show full text]
  • Traditional IRA SEP IRA Roth IRA
    Traditional IRA SEP IRA Roth IRA Disclosure Statement & Custodial Account Agreement Table of Contents Page in Document PART I ‐ COMBINED DISCLOSURE STATEMENT AND CUSTODIAL ACCOUNT AGREEMENT ................................................................... 1 TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNT DISCLOSURE ............................................................................................... 5 ROTH INDIVIDUAL RETIREMENT ACCOUNT DISCLOSURE ........................................................................................................... 9 TRADITIONAL IRA CUSTODIAL ACCOUNT AGREEMENT ............................................................................................................ 13 ROTH IRA CUSTODIAL ACCOUNT AGREEMENT ........................................................................................................................ 18 PART II ‐ TRADITIONAL AND ROTH IRA APPLICATION AND ADOPTION AGREEMENT INSTRUCTIONS ................................................. 23 PART III ‐ TRADITIONAL AND ROTH IRA APPLICATION AND ADOPTION AGREEMENT ....................................................................... 25 CERTIFICATION OF ROLLOVER ASSETS .................................................................................................................................... 33 TRANSFER OF ASSETS/DIRECT ROLLOVER FORM ..................................................................................................................... 35 PART IV – PRIVACY POLICY ...........................................................................................................................................................
    [Show full text]
  • Section 5 Explanation of Terms
    Section 5 Explanation of Terms he Explanation of Terms section is designed to clarify Additional Standard Deduction the statistical content of this report and should not be (line 39a, and included in line 40, Form 1040) T construed as an interpretation of the Internal Revenue See “Standard Deduction.” Code, related regulations, procedures, or policies. Explanation of Terms relates to column or row titles used Additional Taxes in one or more tables in this report. It provides the background (line 44b, Form 1040) or limitations necessary to interpret the related statistical Taxes calculated on Form 4972, Tax on Lump-Sum tables. For each title, the line number of the tax form on which Distributions, were reported here. it is reported appears after the title. Definitions marked with the symbol ∆ have been revised for 2015 to reflect changes in Adjusted Gross Income Less Deficit the law. (line 37, Form 1040) Adjusted gross income (AGI) is defined as total income Additional Child Tax Credit (line 22, Form 1040) minus statutory adjustments (line 36, (line 67, Form 1040) Form 1040). Total income included: See “Child Tax Credit.” • Compensation for services, including wages, salaries, fees, commissions, tips, taxable fringe benefits, and Additional Medicare Tax similar items; (line 62a, Form 1040) Starting in 2013, a 0.9 percent Additional Medicare Tax • Taxable interest received; was applied to Medicare wages, railroad retirement com- • Ordinary dividends and capital gain distributions; pensation, and self-employment income that were more than $200,000 for single, head of household, or qualifying • Taxable refunds of State and local income taxes; widow(er) ($250,000 for married filing jointly, or $125,000 • Alimony and separate maintenance payments; for married filing separately).
    [Show full text]
  • State Individual Income Tax Rates
    STATE INDIVIDUAL INCOME TAXES (Tax rates for tax year 2021 -- as of January 1, 2021) TAX RATE RANGE Number FEDERAL (in percents) of INCOME BRACKETS PERSONAL EXEMPTIONS STANDARD DEDUCTION INCOME TAX Low High Brackets Lowest Highest Single Married Dependents Single Married DEDUCTIBLE ALABAMA 2.0 - 5.0 3 500 (b) - 3,001 (b) 1,500 3,000 500 (e) 2,500 (y) 7,500 (y) Yes ALASKA No State Income Tax ARIZONA (a) 2.59 - 8.0 (aa) 4 27,272 (b) - 163,633 (b) -- -- 100 (c) 12,400 24,800 ARKANSAS (a) 2.0 - 5.9 (f) 3 4,000 - 79,300 29 (c) 58 (c) 29 (c) 2,200 4,400 CALIFORNIA (a) 1.0 12.3 (g) 9 8,932 (b) - 599,012 (b) 124 (c) 248 (c) 383 (c) 4,601 (a) 9,202 (a) COLORADO 4.55 1 -----Flat rate----- -- (d) -- (d) -- (d) 12,550 (d) 25,100 (d) CONNECTICUT 3.0 - 6.99 7 10,000 (b) - 500,000 (b) 15,000 (h) 24,000 (h) 0 -- (h) -- (h) DELAWARE 0.0 - 6.6 7 2,000 - 60,001 110 (c) 220 (c) 110 (c) 3,250 6,500 FLORIDA No State Income Tax GEORGIA 1.0 - 5.75 6 750 (i) - 7,001 (i) 2,700 7,400 3,000 4,600 6,000 HAWAII 1.4 - 11.0 12 2,400 (b) - 200,000 (b) 1,144 2,288 1,144 2,200 4,400 IDAHO (a) 1.125 - 6.925 7 1,568 (b) - 11,760 (b) -- (d) -- (d) -- (d) 12,550 (d) 25,100 (d) ILLINOIS (a) 4.95 1 -----Flat rate----- 2,325 4,650 2,325 -- -- INDIANA 3.23 1 -----Flat rate----- 1,000 2,000 2,500 (j) -- -- IOWA (a) 0.33 - 8.53 9 1,676 - 75,420 40 (c) 80 (c) 40 (c) 2,130 (a) 5,250 (a) Yes KANSAS 3.1 - 5.7 3 15,000 (b) - 30,000(b) 2,250 4,500 2,250 3,000 7,500 KENTUCKY 5.0 1 -----Flat rate----- -----------None----------- 2,690 2,690 LOUISIANA 2.0 - 6.0 3 12,500 (b) - 50,001(b) 4,500
    [Show full text]
  • SC Individual Income Tax: Basic Structure and Comparisons
    South Carolina Individual Income Tax: Basic Tax Structure and Comparisons South Carolina Revenue and Fiscal Affairs Office Updated June 14, 2021 South Carolina’s Individual Income Tax Structure June 2021 2 SC Income Tax Structure – Definitions of Income • Adjusted gross income (AGI) is gross income, such as wages or capital gains, minus adjustments to income, such as contributions to a retirement account or student loan interest. • Most state individual income tax systems are based on federal AGI and have state-specific deductions and exemptions. • Federal taxable income is federal AGI adjusted for the federal standard deduction or itemized deductions. • South Carolina adopts the federal standard deduction or itemized deductions (with a few exceptions), and federal taxable income is the starting point for determining South Carolina taxable income. • Only five states conform to federal taxable income and the federal standard deduction. June 2021 3 SC Tax Structure – State Deductions and Exemptions South Carolina’s other major state deductions contribute to low tax burden In addition to the standard deduction, SC has other deductions and exemptions, the largest of which are: • Dependent exemption - as of tax year 2020, $4,260 can be deducted for each eligible dependent, • Dependents under six - an additional deduction equal to the dependent deduction can be claimed for each dependent under age six, • Social Security - Social Security and Railroad Retirement Benefits are excluded from taxable income, • Age 65 or older - any income up to $15,000 can be deducted, • Retirement income - before age 65, a deduction of retirement income of up to $3,000 can be claimed, and • Net Capital Gains - 44% of net capital gains can be deducted from income.
    [Show full text]
  • Income Definitions for Marketplace and Medicaid Coverage
    Updated October 2019 Key Facts: Income Definitions for Marketplace and Medicaid Coverage Financial eligibility for the premium tax credit, most categories of Medicaid, and the Children’s Health Insurance Program (CHIP) is determined using a tax-based measure of income called modified adjusted gross income (MAGI). The following Q&A explains what income is included in MAGI. How do marketplaces, Medicaid, and deductions include certain contributions to an CHIP measure a person’s income? individual retirement account (IRA) or health savings account (HSA) and payment of student For the premium tax credit, most categories of loan interest. Many income adjustments are Medicaid eligibility, and CHIP, all marketplaces capped or phased out based on income. IRS and state Medicaid and CHIP agencies determine Publication 17 explains adjustments to income in a household’s income using MAGI. States’ more detail. previous rules for counting income continue to apply to people who qualify for Medicaid based on What types of income count towards age or disability or because they are children in MAGI? foster care. All income is taxable unless it’s specifically MAGI is adjusted gross income (AGI) plus tax- exempted by law. Income does not only refer to exempt interest, Social Security benefits not cash wages. It can come in the form of money, included in gross income, and excluded foreign property, or services that a person receives. income. Each of these items has a specific tax definition; in most cases they can be located on Table 1 provides examples of taxable and non- an individual’s tax return (see Figure 1).
    [Show full text]
  • Comparing Average and Marginal Tax Rates Under the Fairtax and the Current System of Federal Taxation
    NBER WORKING PAPER SERIES COMPARING AVERAGE AND MARGINAL TAX RATES UNDER THE FAIRTAX AND THE CURRENT SYSTEM OF FEDERAL TAXATION Laurence J. Kotlikoff David Rapson Working Paper 11831 http://www.nber.org/papers/w11831 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 December 2005 © 2005 by Laurence J. Kotlikoff and David Rapson. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Comparing Average and Marginal Tax Rates Under the FairTax and the Current System of Federal Taxation Laurence J. Kotlikoff and David Rapson NBER Working Paper No. 11831 December 2005, Revised November 2006 JEL No. H2 ABSTRACT This paper compares marginal and average tax rates on working and saving under our current federal tax system with those that would arise under a federal retail sales tax, specifically the FairTax. The FairTax would replace the personal income, corporate income, payroll, and estate and gift taxes with a 23 percent effective retail sales tax plus a progressive rebate. The 23 percent rate generates more revenue than the taxes it replaces, but the rebate's cost necessitates scaling back non-Social Security expenditures to their 2000 share of GDP. The FairTax's effective marginal tax on labor supply is 23 percent. Its effective marginal tax on saving is zero. In contrast, for the stylized working households considered here, current effective marginal labor taxes are higher or much higher than 23 percent. Take our stylized 45 year-old, married couple earning $35,000 per year with two children.
    [Show full text]
  • Unsupported Calculations and Situations in the 2020 Turbotax Individual Federal Tax Software Program
    January 27, 2021 Unsupported Calculations and Situations in the 2020 TurboTax Individual Federal Tax Software Program Income 1. Form W-2 - Agent Reporting: A W-2 with agent reporting contains the words 'Agent For' in Box C and the agency is: • Acting as an agent for two or more employers or is an employer and is acting as an agent for another employer, AND • Pays Social Security wages on behalf of more than one employer, AND • The total of the Social Security wages from these employers is greater than the $137,700 Social Security wage base. The taxpayer should manually calculate the excess Social Security tax withheld. Add the amounts on the 'agent reporting' W-2s that appear in Box 4, Social Security tax withheld less the wage base. Enter the excess amount on Schedule 3, near line 10. 2. Form SSA-1099 / Form RRB-1099 Repayments: If repayments of social security benefits result in a negative amount in Box 5 on Form SSA-1099 or RRB-1099, you may be eligible to take a deduction for this amount. The program does not automatically calculate this deduction. See IRS Publication 525 for more information. 3. State and Local Tax Refunds Entered Directly on Forms (not Interview Screen): If entering state and local refund amounts directly on forms (not entering on TurboTax’s step-by-step interview screens), do not enter Form 1099-G, box 2, state and local income tax refunds on Form 1099-G; instead enter on the Federal Carryover Worksheet. 4. State and Local Income Tax Refunds from Years Prior to 2019: If you received a state or local income tax refund for years prior to 2019 during 2020, you will need to determine what portion (if any) of that refund is taxable.
    [Show full text]
  • Fair Tax for Illinois” FISCAL Jared Walczak FACT Senior Policy Analyst No
    Twelve Things to Know About the “Fair Tax for Illinois” FISCAL Jared Walczak FACT Senior Policy Analyst No. 641 Mar. 2019 Key Findings • New Illinois Gov. J.B. Pritzker (D) has proposed sweeping changes to Illinois’ tax code, advocating a constitutional amendment to permit a graduated-rate income tax and proposing a new rate and bracket structure. • Under the proposal, corporate income would be taxed at 10.45 percent, the third-highest rate in the nation, while pass-through business income would be taxed at a top rate of 9.45 percent, the fourth highest such rate nationwide. • The proposal diverges sharply from ideal—or even typical—income tax structure. It omits inflation indexing (resulting in “bracket creep”), creates a marriage penalty, and includes a recapture provision which subjects the entirety of a taxpayer’s income to the top marginal rate once they reach that bracket. • The neighboring states of Indiana, Iowa, Kentucky, and Missouri have all cut income taxes in recent years, while Illinois may be headed in the opposite direction. • The governor’s proposed tax rates are merely notional; should voters permit a graduated-rate income tax, there are compelling reasons to believe that rates may climb even higher, and that more taxpayers would be subjected to higher The Tax Foundation is the nation’s rates. leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy • Were the proposal implemented, Illinois is projected to decline from 36th to at the federal, state, and local levels. We are a 501(c)(3) nonprofit 48th on the State Business Tax Climate Index, which measures tax structure.
    [Show full text]
  • Calculations Not Supported in the 2017 Turbotax Individual Federal Tax Program
    January 12, 2018 Calculations Not Supported in the 2017 TurboTax Individual Federal Tax Program Income 1. Form W-2 and Code Z: If your Form W-2 has an amount with code Z in box 12 for non-qualified deferred compensation plans under code section 409A, see IRS Publication 15-A for the calculation of the additional tax that must be reported on Form 1040. 2. Form W-2 - Agent Reporting: A W-2 with agent reporting contains the words 'Agent For' in Box C and the agency is: Acting as an agent for two or more employers or is an employer and is acting as an agent for another employer, AND Pays Social Security wages on behalf of more than one employer, AND The total of the Social Security wages from these employers is greater than the $127,200 Social Security wage base. The taxpayer should manually calculate the excess Social Security tax withheld. Add the amounts on the 'agent reporting' W-2s that appear in Box 4, Social Security tax withheld less the wage base. Enter the excess amount on form 1040, near line 71. 3. Form SSA-1099 / Form RRB-1099 Repayments: If repayments of social security benefits result in a negative amount in Box 5 on Form SSA-1099 or RRB-1099, you may be eligible to take a deduction for this amount. The program does not automatically calculate this deduction. See IRS Publication 525 for more information. 4. State and Local Tax Refunds Entered Directly on Forms (not Interview Screen): If entering state and local refund amounts directly on forms (not entering on TurboTax’s step-by-step interview screens), do not enter Form 1099-G, box 2, state and local income tax refunds on Form 1099-G; instead enter on the Federal Carryover Worksheet.
    [Show full text]