710:50-15-90 Oklahoma earned income tax credit

(a) Effective for tax years beginning on or after January 1, 2002, there shall be an Oklahoma Earned Income Tax Credit (EITC) for resident and part year resident individuals. (b) The Oklahoma EITC shall be an amount equal to five percent (5%) of the Federal Earned Income Tax Credit allowed under Section 32 of the Internal Revenue Code. (1) Effective for tax years 2016 through 2021, if the credit exceeds the tax imposed by Section 2355 of Title 68, the excess amount shall not be refunded to the taxpayer, nor shall any amount be carried forward to a subsequent tax year. (2) For tax years beginning on or after January 1, 2022: (A) If the credit exceeds the tax imposed by Section 2355 of Title 68, the excess amount shall be refunded to the taxpayer. (B) The credit shall be computed using the same requirements, other than the five percent (5%) amount to compute the credit as prescribed by this section which shall remain constant, in effect for computation of the earned income tax credit for federal income tax purposes for the 2020 income tax year. [68 O.S. § 2357.43] (3) The Oklahoma EITC may not be paid in advance and must be claimed on the individual income tax return when filed. (c) The credit is to be prorated on the ratio that Oklahoma Adjusted Gross Income bears to Federal Adjusted Gross Income, not to exceed one hundred percent (100%). When the Oklahoma Adjusted Gross Income or the Federal Adjusted Gross Income is negative the ratio will be determined as follows: (1) When the Oklahoma Adjusted Gross Income is negative and is less than the Federal Adjusted Gross Income, the ratio shall be 0%. (For example: Oklahoma Adjusted Gross Income is negative $1,000 and the Federal Adjusted Gross Income is negative $500, the ratio shall be 0%). (2) When the Federal Adjusted Gross Income is negative and is equal to or less than the Oklahoma Adjusted Gross Income, the ratio will be 100%. (For example: Oklahoma Adjusted Gross Income is negative $500 and the Federal Adjusted Gross Income is negative $1,000 the ratio is 100%).