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Bill Summary · SB 942

Summary of SB 942 (North Carolina, 2025 Session) — Reenact EITC

Overview

  • Bill Number/Session: SB 942, 2025 North Carolina legislative session
  • Title: Reenact EITC
  • Filed: April 29, 2026
  • Sponsors: Primary sponsor details not listed; Co-sponsors include
    • Sophia Chitlik
    • Woodson Bradley

Purpose (Intent): Reenactment of the Earned Income Tax Credit (EITC) in North Carolina. The bill aims to restore or reestablish the EITC program within the state’s tax system, aligning with prior or existing statutory authority to provide targeted financial support to low- and moderate-income working households.

Key Provisions and Changes (as implied by the title)

Note: The text provided does not include the full statutory language or a bill digest. The following reflects the typical elements of a reenactment of a state EITC based on standard legislative practice and the bill’s stated title.

  1. Reenactment of State EITC Eligibility and Credit Calculation

    • Reestablishes the North Carolina state EITC program as a refundable tax credit.
    • Establishes eligibility criteria aligned with working individuals and families, often mirroring federal EITC qualification rules (e.g., earned income thresholds, filing status, number of qualifying children).
    • Defines the credit percentage or formula (how the credit is calculated, e.g., a percentage of earned income or a tiered credit for different filing statuses/children).

  2. Interaction with Federal EITC

    • Clarifies that the state EITC is intended to supplement the federal EITC, with possible conformity to federal definitions for earned income, adjusted gross income, and qualifying children.
    • Specifies that taxpayers claiming the federal EITC may also be eligible for the state EITC, subject to state-specific rules.

  3. Refundability and Payment

    • States whether the EITC is refundable, meaning the credit can produce a net refund beyond tax withholding and other credits.
    • Outlines mechanisms for claiming the credit on the North Carolina individual income tax return, and any required documentation.

  4. Application and Compliance

    • Details record-keeping, proof of income, and any documentation required to claim the credit.
    • Sets penalties or enforcement provisions for improper claims, if applicable.

  5. Effective Date and Sunset Provisions

    • Specifies when the reenacted EITC would take effect (e.g., for tax year 2025 or a future year).
    • May include a sunset clause or periodic review to assess the program’s impact and sustainability.

  6. Administrative Rules and Guidance

    • Delegates rulemaking authority to the Department of Revenue or equivalent state agency to administer the EITC, issue guidance, and reconcile with state tax forms and printing.

Who Would Be Affected

  • Taxpayers with Earned Income: Low- and moderate-income working individuals and families who qualify for the EITC under state rules.
  • Tax Filers: North Carolina residents filing individual income tax returns, especially those claiming federal EITC.
  • Households with Qualifying Children: Typically, families with one or more qualifying children receive larger credits, though some programs provide credits to filers with no qualifying children depending on state policy.
  • State Revenue and Compliance Agencies: North Carolina Department of Revenue, other tax administration bodies, and stakeholders involved in tax policy implementation.

Procedural and Timeline Considerations

  • Introduction/Filed Date: April 29, 2026.
  • Next Steps: Standard legislative process—committee referrals (Ways and Means or Finance, Taxation, etc.), hearings, amendments, and floor votes in both chambers, possibly conference committee if differences arise.
  • Effective Date: To be specified in the enacted bill. Reenacted EITC provisions typically apply to tax years beginning after the effective date, with guidance for current-year filers if applicable.
  • Administrative Implementation: Requires Department of Revenue oversight for rules, forms, and taxpayer education.

Potential Impacts and Considerations

  • Economic Support: Provides targeted tax relief to low- and moderate-income households, potentially boosting disposable income and local consumption.
  • State Budget: Requires funding appropriations or offsets within the state budget; the credit amount and expected take-up influence revenue projections.
  • Administrative Burden: May necessitate updated tax forms, instructions, and outreach to ensure eligible taxpayers claim the credit correctly.

If the full bill text becomes available, I can extract precise credit percentages, income thresholds, eligibility rules, refundability details, and the exact effective date for a more granular summary.

Compiled from official sources — confirm details with the bill’s official record.

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