HB1438
To Create An Income Tax Credit For Taxpayers Sixty-five And Older In An Amount Equal To The Taxpayer's Property Tax Payment On A Homestead.
AI-Generated Summary
This bill proposes to amend Arkansas state income tax laws by introducing a new income tax credit. This credit is specifically for taxpayers who are sixty-five years of age or older. The amount of the credit would be equivalent to the real property taxes paid by the taxpayer on their homestead during the tax year. However, any amounts paid by the taxpayer for delinquent property taxes or penalties in the past year would be subtracted from the credit amount. If the calculated credit exceeds the taxpayer's total income tax liability, the remaining amount will be refunded to the taxpayer. The act is designated as an amendment to Arkansas Code Title 26, Chapter 51, Subchapter 5. The proposed changes are set to take effect for tax years beginning on or after January 1, 2025. The primary purpose is to provide financial relief to older homeowners regarding their property tax burden.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill, if enacted, would be Arkansas residents who are sixty-five years of age or older and own a homestead. These individuals would directly benefit from a reduction in their state income tax liability, as the credit can offset their tax burden or result in a refund. This could provide significant financial relief, particularly for seniors on fixed incomes who may be struggling to meet property tax obligations.
Who Might Suffer?
The primary entity that would be negatively impacted by this bill is the state of Arkansas, specifically its general revenue fund. By providing income tax credits and potential refunds, the state will experience a reduction in tax collections. The extent of this impact would depend on the number of eligible taxpayers and the total amount of property taxes paid by them. This could lead to a decrease in available funds for other state programs and services.