AN ACT to promote economic recovery for Individuals and families in North Carolina.

Whereas, approximately 1,473,397 North Carolinians have filed for unemployment benefits between March 15, 2020, when coronavirus‑related closures started going into place, and March 29, 2021; and

Whereas, there were 1.4 million North Carolinians living at or below the poverty line prior to the COVID‑19 pandemic making less than $25,750 for a family of four; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.(a)  Intent; Use. – It is the intent of the General Assembly to use American Rescue Plan Act of 2021 funds for the Department of Revenue to provide economic support, consistent with this section, to low‑income families and families with employment interruptions resulting from the COVID‑19 pandemic.

SECTION 1.(b)  Individual and Family Relief Grant Program. – There is created the Individual and Family Relief Grant Program to be administered by the Department of Revenue. The Department must provide a one‑time grant to an eligible individual under this section.

SECTION 1.(c)  Grant Award. – The grant amount is (i) one thousand dollars ($1,000) for an eligible individual who received benefits from the Division of Employment Security for unemployment for at least three months during the 2020 taxable year and (ii) two hundred fifty dollars ($250.00) for any other eligible individual. The Department of Revenue must award the grants as soon as practicable, but no later than October 1, 2021. The Department cannot disclose information regarding individual grants awarded under this program except as allowed for tax information in G.S. 105‑259(b)(1) through (55). The Department may report on the aggregate grant awards provided under this program.

A grant may be issued by direct deposit if the individual received a 2019 State tax refund by direct deposit. In such circumstances, the direct deposit should be issued to the account to which the individual's 2019 State tax refund was deposited. If the Department becomes aware that such account is no longer associated with the individual or that the owner of the account has not remitted the grant to the individual entitled to the grant, then the Department may demand that the recipient of the deposit return the grant. In such circumstances, the Department may also reissue the grant to the individual by virtue of a check mailed to the address on the individual's 2019 State income tax return. Grants issued by checks will be mailed to the address on the individual's 2019 State income tax return, unless an updated address is available, or the address on the individual's application. Checks issued by the Department under this subsection are valid for 90 days.

SECTION 1.(d)  Eligibility. – An eligible individual is an individual who applies for a grant under this program on a form prescribed by the Secretary of Revenue postmarked on or before July 1, 2021, and meets all of the following conditions:

(1)        The applicant has either (i) a filing status of single and an adjusted gross income of less than thirty‑five thousand dollars ($35,000) or (ii) any other filing status and an adjusted gross income of fifty‑three thousand dollars ($53,000).

(2)        The applicant provides a name, mailing address, and any other information required by the Secretary.

SECTION 2.(a)  Part 2 of Article 4 of Subchapter I of Chapter 105 of the General Statutes is amended by adding a new section to read:

§ 105‑153.11.  Credit for qualifying relative.

(a)        Credit. – A taxpayer who has one or more qualifying relatives, as determined pursuant to Table 5 of Publication 501 of the Internal Revenue Service, is allowed a credit against the tax imposed by this Part equal to two hundred fifty dollars ($250.00). The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.

(b)        Limitations. – A nonresident or part‑year resident who claims the credit allowed by this section shall reduce the amount of the credit by multiplying it by the fraction calculated under G.S. 105‑153.4(b) or (c), as appropriate. The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of the taxpayer.

SECTION 2.(b)  Effective for taxable years beginning on or after January 1, 2022, G.S. 105‑153.11, as enacted by subsection (a) of this section, is repealed.

SECTION 3.(a)  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:

(15)    The amount paid during the taxable year by the Department of Revenue as a one‑time grant to a taxpayer who is an eligible individual for the purpose of providing economic support pursuant to the Individual and Family Relief Grant Program.

SECTION 3.(b)  Effective for taxable years beginning on or after January 1, 2022, G.S. 105‑153.5(b)(15), as enacted by subsection (a) of this section, is repealed.

SECTION 4.  Sections 1 and 3(a) of this act become effective when an act of the General Assembly appropriating funds for the implementation of Section 1 of this act becomes effective. Section 2(a) of this act is effective for taxable years beginning on or after January 1, 2021. Except as otherwise provided, the remainder of this act is effective when it becomes law.