Small town teachers might be eligible for a tax credit if this House bill passes. HB 38 authored by Rep. Dortch would authorize an income tax credit for licensed teachers who have been working for at least three years in a school district considered a “small town.’
Subject to the provisions of this section, a taxpayer shall be allowed a refundable credit against the income taxes imposed under this chapter for the taxable year in which the taxpayer served as a licensed teacher employed by a public school district in a small town. The amount of the credit allowed for teachers who have three (3) to five (5) years of service as a licensed teacher in a small town shall be Two Thousand Five Hundred Dollars ($2,500.00). The amount of the credit allowed for teachers who have more than five (5) years of service as a licensed teacher in a small town shall be Five Thousand Dollars ($5,000.00). If the amount of credit claimed by a taxpayer exceeds the amount of income tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to the taxpayer under this chapter, except credit for tax payments made by or on behalf of the taxpayer, then the taxpayer shall receive a refund from the Department of Revenue for the amount of such excess.