Other Tax Credits

State-specific program rule OtherTaxCreditType indicates whether a state has other tax credits that are modeled by TRIM3's State Tax model. Up to three credits can be specified for each state. The total amount of other tax credits is saved as micro-level variable StateOtherTaxCredit.

Two points are important to note. First, although these options are state-specific, they can be turned on for any state at any time. (Eg, the Arizona family tax credit can be turned on for Arkansas). Second, these options make use of other program rules to hold numbers needed in the calculations. The program rules required to implement each option are described in the discussions below.

• Arizona Family Income Tax Credit
• California Exemption Credit
• Connecticut Personal Credit
• Idaho Grocery Credit
• Indiana Automatic Tax Refund
• Indiana Elderly Credit
• Kansas Food Sales Credit
• Louisiana School Aged Child Credit
• Maine Sales Tax Fairness Credit
• Massachusetts Limited Income Credit
• Minnesota Marriage Credit
• New York Child Credit
• New York Family Tax Relief Credit
• New York Household Credit
• North Carolina Child Credit
• North Dakota Marriage Credit
• Ohio Exemption Credit
• Ohio Marriage Credit
• Ohio Pension Credit
• Oklahoma Child Credit
• Oklahoma Sales Tax Relief Credit
• South Carolina Two Wage-Earner Credit
• Utah Taxable Income Credit/Adjustment
• Wisconsin Itemized Deduction Credit
• Wisconsin Marriage Credit

Arizona Family Income Tax Credit

If the option "Arizona family tax credit" is selected then the rules FamilyIncomeTaxCreditThresholdSingle_AZ, FamilyIncomeTaxCreditThresholdJoint_AZ, FamilyIncomeTaxCreditThresholdHead_AZ and FamilyIncomeTaxCreditMax_AZ must have values.

For each filing status, the correct income bracket is calculated by comparing StateAGI with the appropriate threshold. The credit is then equal to NumDependents plus one if not filing joint or plus two if filing joint, times $40 capped at the value of FamilyIncomeTaxCreditMax_AZ. Note that for those filing combined separate, the credit is calculated for each spouse using the IfSep... variables and then both amounts are added together to arrive at the total credit amount.

California Exemption Credit

If the option "California exemption credit" is selected then the rule ExemptionCreditLimit_CA must have values.

For units with FedAGI greater than ExemptionCreditLimit_CA the credit is calculated in two parts as follows:

agiDiff = ( FedAGI - ExemptionCreditLimit_CA[FilingStatus] ) / 2500, rounded to the nearest dollar

Calc1 = PersonalExemptionAmt[State][FilingStatus] - agiDiff * 6 * (1 if file as Head of Household, 2 if Joint + number of adults over 65), if negative then Calc1 is set to zero.

Calc2 = PersonalExemptionAmt[State][DependentKids] * NumDependentKids - agiDiff * 6 * NumDependentKids, if negative then Calc2 is set to zero.

The credit is then equal to Calc1 plus Calc2.

Note that there is no special processing for the combined separate case.

Connecticut Personal Credit

If the option "Connecticut personal exemption" is selected then the rules PersonalCreditBracketsSingle_CT, PersonalCreditBracketsJoint_CT, PersonalCreditBracketsHead_CT and PersonalCreditRates_CT must have values.

The bracket is determined by comparing StateAGI with the values in the appropriate bracket rule (PersonalCreditBracketsSingle_CT, PersonalCreditBracketsJoint_CT or PersonalCreditBracketsHead_CT). The credit is then equal to the corresponding value in PersonalCreditRates_CT times StateTaxWithoutCredits.

Idaho Grocery Credit

Units that are required to file state taxes and those with a head or spouse who is over 62 or disabled are eligible for the Idaho grocery credit.  The State Tax simulation uses simulated SSI receipt contained in program ruleAnnualSSIBen as the indicator of disability.

Prior to version 18, if the "Idaho grocery credit" option is selected, variables must be supplied for the variable list rules GroceryCreditAmtPerPerson_ID and AdditionalGroceryCreditAmt_ID.  The credit is equal to the value of GroceryCreditAmtPerPerson_ID times the value of StateNumExemptions plus AdditionalGroceryCreditAmt_ID times the number of persons (head or spouse) age 65 or older.

Beginning with version 18, the GroceryCreditAmtPerPerson_ID rule is discontinued, and state array rules GroceryCreditIncomeLimit_ID and GroceryCreditPerPerson_ID are used instead.  If taxable income is less than or equal to the first income limit in GroceryCreditIncomeLimit_ID, then the credit is equal to the first value in GroceryCreditPerPerson_ID times the number of exemptions plus the amount in AdditionalGroceryCreditAmt_ID times the number of persons 65 or older.  Else if taxable income is less than or equal to the second income limit in GroceryCreditIncomeLimit_ID, then the credit is equal to the second value in GroceryCreditPerPerson_ID times the number of exemptions plus the amount in AdditionalGroceryCreditAmt_ID times the number of persons 65 or older. If the taxable income is higher than the second limit, no grocery tax credit is granted.

Prior to version 23, all units that have to file state taxes according to WhoMustFile, are eligible for the Idaho grocery credit.Beginning with version 23 and the use of the rule StateIncomeTaxType, a unit is eligible for the grocery credit if the unit's gross income is below the threshold amount specified in GroceryCreditThreshold_ID (unless the old WhoMustFile rules are invoked by setting SimulationMode to 1).

Starting with version 37, the option to prorate the Idaho Grocery Credit based on SNAP participation is available. When the rule ProrateGroceryCredForMonthsElig_ID is set to "yes", then a variable must be specified in SNAPMonthsOfParticipation. The grocery credit is calculated as described previously and then multiplied by (12 - SNAPMonthsOfParticipation) / 12. Thus, if a unit participates in SNAP for 12 months, they then do not receive the grocery credit.

Indiana Automatic Tax Refund

If the option "Indiana automatic tax refund" is selected, taxpayers with tax liability after refundable credits greater than $0 receive the credit amount specified by AutomaticTaxRefundAmount_IN. The credit is refundable.

Indiana Elderly Credit

If the option "Indiana elderly credit" is selected then the rules ElderlyCreditBrackets1Eld_IN, ElderlyCreditAmounts1Eld_IN, ElderlyCreditBrackets2Eld_IN, and ElderlyCreditAmounts2Eld_IN must have values.

Only units with at least one taxpayer (head or spouse) age 65 or older are eligible for this credit. For units with only one taxpayer age 65 or older, the bracket is calculated by comparing FedAGI with the values entered in the rule ElderlyCreditBrackets1Eld_IN. The credit is then equal to the corresponding amount in the rule ElderlyCreditAmounts1Eld_IN. Similarly, for units with both the head and the spouse age 65 or older, the bracket is calculated using FedAGI and ElderlyCreditBracket2Eld_IN The credit is then equal to the corresponding amount in the rule ElderlyCreditAmounts2Eld_IN.

Kansas Food Sales Credit

If the option "Kansas food sales credit" is selected then the rules FoodSalesCreditBrackets_KS and FoodSalesCreditAmts_KS must have values. Beginning in 2014, heads of households can no longer qualify for an extra exemption for this credit.

Units eligible for this credit are those with at least one taxpayer (head or spouse) age 55 or older, or with a dependent under 18, or a taxpayer (head or spouse) who is disabled. . Note that SSI receipt (according to the variable specified in program rule AnnualSSIBen) is used as a proxy for disability.

First we calculate the bracket by comparing StateAGI with the values entered in the rule FoodSalesCreditBrackets_KS. The credit is then equal to the corresponding value in FoodSalesCreditAmts_KS multiplied by FedNumExemptions plus one if the unit is filing as head of household.

Note that there is no requirement for a tax unit to have any StateAGI to receive this credit. If there is a positive "credit amount" specified in FoodSalesCreditAmts_KS for the bracket that includes units with StateAGI of $0 or less, then a tax unit without any positive StateAGI will be eligible for this credit.

Program rule FSCreditRefundability_KS specifies whether the Kansas food sales credit is refundable.

Louisiana School Aged Child Credit

If the option "LA School Credit" is selected, then the rules MinAgeSchoolCredit_LA, MaxAgeSchoolCredit_LA, and SchoolCredit_LA must have values. The credit is calculated as SchoolCredit_LA multiplied by the number of children in the family with age greater than or equal to MinAgeSchoolCredit_LA and less than or equal to MaxAgeSchoolCredit_LA.

Maine Sales Tax Fairness Credit

If the option “Maine Sales Tax Fairness Credit” is selected, then this credit is computed. The credit is set initially to the value in SalesTaxFairnessBaseCredit_ME, which varies by number of exemptions. For the purposes of this credit, the number of exemptions is computed as the number of taxpayers (1 if filing as single or as head-of-household, 2 if filing as joint) plus the number of dependents. If state AGI exceeds SalesTaxFairnessPhaseOutBegin_ME, then the credit is reduced using parameters SalesTaxFairnessPhaseOutRate_ME and SalesTaxFairnessPhaseOutIncrement_ME. All of the phase-out parameters vary by filing status (single, joint, or head of household). Note that this credit is not currently implemented for units filing as "combined-separate". (If it is turned on for a state with combined-separate filing, the combined-separate units will always have a $0 value for this tax credit.)

The reduction of the base value is initially computed as (state AGI – SalesTaxFairnessPhaseOutBegin_ME) * SalesTaxFairnessPhaseOutRate_ME.

If that reduction is not already an exact multiple of SalesTaxFairnessPhaseOutIncrement_ME, it is rounded up to the next higher multiple of SalesTaxFairnessPhaseOutIncrement_ME.

Example: Assume that the base credit for a tax unit’s number of exemptions = $160, and that the phase-out parameters for the unit’s filing status are that the phase-out begins at $30,000, the rate is 2 percent, and the increment value is $15. If the tax unit’s income = $33,867, the initial phase-out amount is $77.34 (computed as 3,867 * 0.02); that is rounded up to the next higher even multiple of $15, which is $90. The initial credit of $160 minus the phase-out amount of $90 gives a final credit of $70.

The credit cannot be reduced below $0.

The final credit amount is fully refundable.

Massachusetts Limited Income Credit

If the option "Massachusetts limited income credit" is selected then the rules LimitedIncomeCreditSingleIncome_MA, LimitedIncomeCreditJointIncome_MA, LimitedIncomeCreditHeadIncome_MA and LimitedIncomeCreditDependent_MA must have values.

Units eligible for this credit have income greater than the appropriate threshold given in either LimitedIncomeCreditSingleIncome_MA, LimitedIncomeCreditJointIncome_MA or LimitedIncomeCreditHeadIncome_MA. Income for the unit is defined as the sum of TaxableIncomeComponents_MA, Dividends and FedCapitalGains for both the head and the spouse. If this value is negative then it is reset to zero.

For eligible units filing as single, the credit is equal to StateTaxWithoutCredits minus ten percent of the difference between income and LimitedIncomeCreditSingleIncome_MA.

For eligible units filing as joint, the credit is equal to StateTaxWithoutCredits minus ten percent of income minus LimitedIncomeCreditJointIncome_MA plus LimitedIncomeCreditDependent_MA times NumDependents.

For eligible units filing as head-of-household, the credit is equal to StateTaxWithoutCredits minus ten percent of income minus LimitedIncomeCreditHeadIncome_MA plus LimitedIncomeCreditDependent_MA times NumDependents.

In all cases, the credit is not allowed to be negative.

Note that the credit is unavailable to those filing combined separate.

Minnesota Marriage Credit

If the option "Minnesota marriage credit" is selected then the rules ExemptionSubtraction_MN, MarriageCreditMinEarnLimit_MN, MarriageCreditJointIncomeLimit_MN and MarriageCreditMaxCredit_MN must have values.

This credit is only available to units filing jointly. Additionally, there are income and earnings limits that must be met. If either limit is met then the unit is eligible. If sum of TaxableIncomeComponents_MN for the head and the spouse is greater than the value MarriageCreditJointIncomeLimit_MN then the unit is eligible. The sum of CPS variables, given by the EarnedIncome program rule and FederalPension, PrivatePension, MilitaryRetirement, StateOrLocalPension and FedTaxableSocialSecurity is calculated separately for both the head and the spouse. The least of the two is retained. If this value is greater than MarriageCreditMinEarnLimit_MN, the unit is eligible.

The credit is calculated as follows. We calculate the tax without credits twice, once using the minimum earnings minus ExemptionSubtraction_MN and once using total income minus minimum earnings plus ExemptionSubtraction_MN. The credit is then equal to StateTaxWithoutCredits minus the sum of these two calculations. We place an upper limit on the credit at MarriageCreditMaxCredit_MN and do not allow the credit to go below zero.

New York Child Credit

If the option "NY Child Credit" is selected then the rules QualifChildMinAge_NY, PercentOfFedCTC_NY, PhaseOutPointCTC_NY and ChildTaxCreditMin_NY must have values.

The output variable NYChildTaxCreditQualifyingKids is calculated similarly to ChildTaxCreditQualifyingKids from FedTax using the FedTax variable ChildCreditQualifyingChild. However, NYChildTaxCreditQualifyingKids only includes children that are at least as old as the age in the program rule QualifChildMinAge_NY. After the New York child credit is calculated, if federal AGI is greater than the amount of PhaseOutPointCTC_NY for the appropriate filing status, then the module ensures that the NY Child Credit does not go below NYChildTaxCreditQualifyingKids * ChildTaxCreditMin_NY.

New York Family Tax Relief Credit

The "NY Family Tax Relief Credit" option is controlled by program rules FamilyTaxCreditAgeLim_NY, FamilyTaxCreditAmt_NY and FamilyTaxCreditBracket_NY. To be eligible for this refundable credit, a unit's state tax liability must not be negative, and the unit must have dependents below the age defined by StateTaxCreditAgeLim_NY. For eligible tax units, if the unit's adjusted gross income is less than or equal to the first AGI bracket amount in FamilyTaxCreditBracket_NY, the credit is equal to the credit amount for that bracket contained in FamilyTaxCreditAmt_NY. Likewise, if a unit's AGI is less than or equal to bracket amounts 2 or 3 in FamilyTaxCreditBracket_NY, the credit is equal to the credit amount in FamilyTaxCreditAmt_NY corresponding to the unit's AGI bracket.

New York Household Credit

If the option "New York household credit" is selected then the rules HHCreditBracketsSingle_NY, HHCreditBaseAmtSingle_NY, HHCreditAdditionsSingle_NY, HHCreditBracketsJoint_NY, HHCreditBaseAmtJoint_NY, HHCreditAdditionsJoint_NY, HHCreditBracketsHead_NY, HHCreditBaseAmtHead_NY and HHCreditAdditionsHead_NY must have values.

First we calculate the bracket by comparing FedAGI to either HHCreditBracketsSingle_NY, HHCreditBracketsJoint_NY or HHCreditBracketsHead_NY. The credit is then equal to the corresponding value in HHCreditBase..._NY plus HHCreditAdditions..._NY times StateNumExemptions minus one.

North Carolina Child Credit

If the option "North Carolina child credit" is selected then the rules FedAGIEligibleForChildCredit_NC, FedAGIEligibleForChildCredit2_NC, and ChildCreditAmounts_NC must have values.

Units are eligible for the first credit in ChildCreditAmount_NC if both FedChildTaxCredit is greater than zero and FedAGI is less than FedAGIEligibleForChildCredit_NC[FilingStatus]. If units are ineligible for the first credit because FedAGI is too high, then they may be eligible for the second credit in ChildCreditAmounts_NC if FedAGI is less than FedAGIEligibleForChildCredit2_NC[FilingStatus]. If the unit is eligible for one of these credits, the final credit value is equal to the dollar amount given by ChildCreditAmounts_NC times the value FedNumQualifyingKids.

North Dakota Marriage Credit

If the option "North Dakota marriage credit" is selected then the rules MarriageCreditMax_ND, and MarriageCreditDeduction_ND must have values.

This credit is only available to units filing jointly. The sum of the amounts given by the EarnedIncome and FedTaxableSocialSecurity program rules is calculated separately for both the head and the spouse. The lower of the two is kept as earned income.

The credit is calculated as follows. We calculate the tax without credits twice, once using the minimum earnings minus MarriageCreditDeduction_ND and once using total income minus minimum earnings plus MarriageCreditDeduction_ND. The credit is then equal to StateTaxWithoutCredits minus the sum of these two calculations. We place an upper limit on the credit at MarriageCreditMax_ND and do not allow the credit to go below zero.

Oklahoma Child Credit

If the option "Oklahoma child credit" is selected then the rules MaxCTCIncome_OK and PctOfFederalCTC_OK must have a value.

Units are eligible for this credit if FedAGI is small than or equal to MaxCTCIncome_OK. The credit is then equal to the dollar amount given by the sum of FedAdditionalChildTaxCredit and FedChildTaxCredit, times the value PctOfFederalCTC_OK.

Oklahoma Sales Tax Relief Credit

If the option "Oklahoma sales tax relief credit" is selected then the rules SalesTaxCreditAmt_OK, MaxIncomeSalesTaxCreditKids_OK and MaxIncomeSalesTaxCreditNoKids_OK must have a value.

Units are eligible for this credit if they have not received TANF during the tax year and if the sum of StateAGI, FedTaxableSocialSecurity and SSI received by the family is below the threshold given by MaxIncomeSalesTaxCreditNoKids_OK (for units with out qualifying dependent kids) or MaxIncomeSalesTaxCreditKids_OK (for units with qualifying dependent kids). The credit is then equal to the dollar amount given by the SalesTaxCreditAmt_OK, times the value in StateNumExemptions.

Ohio Exemption Credit

If the option "Ohio exemption credit" is selected then the rule ExemptionCredit_OH must have a value. All units whose state taxable income is less than the amount in ExemptionCreditIncLimit_OH are eligible for the credit, which is equal to StateNumExemptions times ExemptionCredit_OH.

Ohio Marriage Credit

If the option "Ohio marriage credit" is selected then the rules MarriageCreditBrackets_OH, MarriageCreditRates_OH, MarriageCreditQualAGI_OH and MarriageCreditMax_OH must have values.

For this credit, it is necessary to sum up all non-refundable credits and calculate a proxy of the value of tax after non-refundable credits. (The actual value of StateTaxAfterNRCredits has not yet been calculated.) Then, the bracket is calculated by comparing StateTaxableIncome with MarriageCreditBrackets_OH. The credit is then equal to the corresponding rate in MarriageCreditRates_OH times the proxy for tax after non-refundable credits. The credit is capped at MarriageCreditMax_OH.

This credit is different from all other tax credits in that it requires knowing about all other non-refundable tax credits at its calculation. For this reason, no matter what order the credits are listed in the rule OtherTaxCreditType, this credit will always be preformed last. Additionally, only credits that are explicitly non-refundable are used in calculating the tax after non-refundable credits. If there is a credit specified that has both a non-refundable and a refundable credit or a choice between the two, it is excluded here. These credits are the Maryland EITC, and Louisiana,Nebraska, Oregon and Vermont childcare credits.

Ohio Pension Credit

If the option "Ohio pension credit" is selected then the rules FederalPension, PrivatePension, MilitaryRetirement, StateOrLocalPension, PensionIncomeBracket_OH, and PensionCreditAmt_OH must have values.

The credit increases with pension income, so the first amount in PensionIncomeBracket_OH that the unit's pension income is less than or equal to determines which credit amount in PensionCreditAmt_OH the unit may receive. For example, if the unit's pension income is less than or equal to the second amount in PensionIncomeBracket_OH, the unit is eligible for the second credit amount in PensionCreditAmt_OH.

South Carolina Two Wage-Earner Credit

If the option "South Carolina two wage-earner credit" is selected then the rules TwoWageCreditRate_SC and TwoWageCreditMaxCredit_SC must value values.

Units who are filing jointly are eligible for this credit. The credit is calculated as the minimum of EarnedIncome for the head and the spouse (if the value is negative then it is set to zero to avoid a negative credit) multiplied by the rate given in TwoWageCreditRate_SC capped at the value given in TwoWageCreditMaxCredit_SC.

Utah Taxable Income Credit/Adjustment

If the option "UT Taxable Income Credit" is selected, the rules TaxableIncomeCreditRate_UT, TaxableIncomeThreshHead_UT, TaxableIncomeThreshJoint_UT, and TaxableIncomeThreshSingle_UT must have values. The adjustment is calculated after all other credits have been computed. The results variable TaxableIncomeAdjustment_UT is calculated as the difference between StateTaxableIncome and the appropriate threshold (If negative, then the difference is set to zero) multiplied by TaxableIncomeCreditRate_UT. The value of the adjustment is not allowed to exceed the sum of StateDeduction and StateExemptions. The value of TaxableIncomeAdjustment_UT is then added to StateTaxWithoutCredits and all other credits are subtracted as usual to arrive at PotentialStateTax.

Wisconsin Itemized Deduction Credit

If the option "Wisconsin itemized deduction credit" is selected then the rules ItemizedDeductionComponents and ItemizedDeducCreditRate_WI must have values.

The credit is equal to (the sum of ItemizedDeductionComponentsfor both the head and spouse - StateStandardDeduction) * ItemizedDeducCreditRate_WI. If this value is negative, then the credit is equal to zero. Further, the value of this credit is capped at StateTaxWithoutCredits.

Wisconsin Marriage Credit

If the option "Wisconsin marriage credit" is selected then the rules MarriageCreditRate_WI and MarriageCreditMax_WI must have values.

This credit is only available for those filing jointly. The credit is calculated as follows. Earnings for both the head and the spouse are calculated separately. Earnings are defined as the sum of the variables specified by the EarnedIncome program rule. The smaller of the two values is kept. If it is negative, then it is set to zero. (A negative earnings amount would result in a negative credit.) The credit is then equal to MarriageCreditRate_WI times the minimum earnings amount capped at MarriageCreditMax_WI.