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HB 1015

TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO CREATE AN INCOME TAX CREDIT FOR DEPENDENT CHILDREN.

2025 Regular Session Introduced by Andrew Collins and 2 co-sponsors

House Bill 1015 proposed a $300 refundable tax credit for families with dependent children, benefiting 370,000 taxpayers but ultimately died in committee.

Died in House Committee at Sine Die adjournment.
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WeVote Research Nonpartisan
Bill Summary · HB 1015

Summary of House Bill 1015

Bill Number: HB 1015
Title: To Amend the Individual Income Tax Laws; and to Create an Income Tax Credit for Dependent Children
Status: Died in House Committee at Sine Die adjournment
Introduced: November 20, 2024
Effective Date: For tax years beginning on or after January 1, 2025

Purpose and Intent

House Bill 1015 aimed to amend Arkansas's individual income tax laws by introducing a refundable income tax credit specifically for taxpayers who support dependent children. The intent was to provide financial relief to families with qualifying dependents, thereby enhancing the economic well-being of households with children.

Key Provisions

  • Income Tax Credit: The bill proposed a $300 refundable tax credit for each qualifying child.
  • Definition of Qualifying Child: The bill adopted the definition of "qualifying child" from the Internal Revenue Code (IRC) § 152(c) as it existed on January 1, 2025, but limited it to individuals under the age of 18 at the end of the tax year.
  • Income Thresholds:
    • Individual taxpayers with a net income of up to $100,000 could claim the credit.
    • Taxpayers filing jointly with a net income of up to $200,000 were also eligible.
    • Married taxpayers filing separately could each claim a $150 credit if they met the income thresholds.
  • Cost-of-Living Adjustment: The Department of Finance and Administration (DFA) was required to adjust the credit amount annually based on the Consumer Price Index.
  • Refundable Credit: If the credit exceeded the taxpayer's liability, the excess amount would be refunded.

Fiscal Impact

  • Projected Revenue Reduction: The bill was estimated to reduce general revenue by:
    • $238 million in FY2026
    • $245 million in FY2027 (including a 3% inflation adjustment)
  • Taxpayer Impact: Approximately 370,000 taxpayers with 793,000 dependents were expected to benefit from the credit, with an overall tax liability reduction of $134 million and $83 million in refundable credits.

Resources Required

  • Implementation would require updates to computer programs, tax forms, and instructions, with an estimated cost of $24,000 for programming and $4,000 annually for maintenance.
  • Four additional auditor positions would be necessary to verify credits and audit returns, costing approximately $320,000 per year.

Procedural Aspects

  • The bill was introduced and referred to the House Committee on Revenue & Taxation.
  • An amendment was adopted on January 16, 2025, which included changes to the sponsorship and language of the bill.
  • Ultimately, the bill died in committee on May 5, 2025, and did not progress to a vote.

Conclusion

House Bill 1015 sought to provide significant tax relief to families with dependent children in Arkansas. Although it was designed to support low- and middle-income taxpayers, the bill did not advance past the committee stage, reflecting the complexities and challenges of tax legislation.

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

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