Sec. 1. 36 MRSA §5219-S, as amended by PL 2003, c. 20, Pt. GG, §1, is further amended to read:

§5219-S. Earned income credit

A taxpayer is allowed a refundable credit against the taxes otherwise due under this Part equal to 5% 30% of the federal earned income credit for the same taxable year, except that for tax years beginning in 2003, and 2004 and 2005, the applicable percentage is 4.92% instead of 5%. The credit may not reduce the state income tax to less than zero.

Sec. 2. Application. This Act applies to tax years beginning on or after January 1, 2005.

SUMMARY

This bill expands the Maine earned income tax credit by increasing it from 5% to 30% of the federal credit and by making it refundable.