Yesterday the Charleston Area Alliance hosted their annual Issues and Eggs breakfast, kicking off the first day of West Virginia’s 80th Legislative Session. Several gubernatorial hopefuls were in attendance, including Speaker Thompson, Secretary of State Natalie Tennant, Treasurer John Perdue, Acting Senate President Jeff Kessler, Senator Brooks McCabe, and former Secretary of State Betty Ireland. Interesting to note that Acting Governor Tomblin was not in attendance, nor do I recall him being there last year.
The topic of discussion, just like last year, was the Brains for Business bill. For tax years beginning on or after January 1, 2011, this bill allows a credit against state income taxes for any eligible taxpayer for a portion of the interest paid on a qualified student loan by the taxpayer in the tax year that the taxpayer paid the interest on the qualified student loan. The tax credit is equal to the amount of money paid as interest on a qualified student loan in the tax year up to a maximum of $500.
A carryover is allowed for any amount the credit exceeds the taxpayers state income tax liability. No carry back to a prior taxable year is allowed. A tax credit is subject to recapture, elimination or reduction if it is determined by the Tax Commissioner that a taxpayer was not entitled to the credit claimed.
Only taxpayers under the age of 40 are eligible for the tax credit and the loan must have been used for the purposes of paying educational expenses or living expenses to obtain a degree from a regionally accredited post secondary institution in the United States or any accredited post secondary institution within West Virginia.
In addition to the tax credit, the bill also allows a deduction in the amount of $25,000 received from any source after December 31, 2011, by a taxpayer who has graduated from a higher education institution in a tax year, which is not more than two years prior to the year in which the taxpayer is filing. This deduction is limited to two years, and is only applicable to those graduating from a regionally accredited post secondary institution in the United States or any accredited post secondary institution within West Virginia.
According to Julie Cyphers, one of Generation Charleston’s two new co-chairs, "It is important to create an atmosphere in West Virginia where businesses know that the young talent they need to thrive has a significant incentive to remain in West Virginia."
Hopefully the bill will be introduced next week, but we will not know for sure until tomorrow. It was introduced last year and did not pass, but several elected officials are much more optimistic about its success during this legislative session (and for what it’s worth, this Politico in Stilettos wholeheartedly endorses this bill).
WV has got to do better than that. $500 maximum?? It's a step in the right direction, but honestly why not a steeper tax break?
ReplyDeleteOne thing WV has to deal with is college grads leaving the state. From what I understand there is a huge outflow of college grads, especially those in the top of the class. I would love to help a struggling town like say, Welch, by starting a business in an economically deprived area (internet businesses are mobile), but nothing in the WV tax code really incentivizes this.
Places like Minneapolis-St. Paul, Minnesota, where I live have many amenities that draw in businesses besides our tax code, but you would think a place like WV that doesn't offer the same amenities would try to draw in businesses (and in effect, brains) to their state by offering better tax incentives. Offer me a tax credit against my student loans (ones already incurred, not future schooling), and then you would have me thinking about moving out there.