In Re Zingale
451 B.R. 412
6th Cir. BAP2011Background
- Debtors filed a Chapter 7 petition on January 28, 2010.
- Trustee objected to exempting the non-refundable portion of the 2009 Child Tax Credit ($2,903).
- Debtors claimed an Ohio exemptions under § 2329.66(A)(9)(g) for $4,000 related to the CTC.
- Federal return shows tax liability $2,934, payroll tax withholdings $6,777, refund $8,542 including $1,097 refundable portion.
- Bankruptcy court held the non-refundable CTC is not a “payment” exemptible under Ohio law.
- Panel affirms bankruptcy court, holding only the refundable portion may be exempted; non-refundable portion not property of the estate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether non-refundable CTC may be exempted as a payment under Ohio law. | Zingale (Debtors) | Trustee | No; non-refundable CTC is not a payment under § 2329.66(A)(9)(g) and not property of the estate. |
Key Cases Cited
- In re Beltz, 263 B.R. 525 (Bankr. W.D. Ky. 2001) (non-refundable credit not exempt; refunds depend on estate status)
- In re Koch, 299 B.R. 523 (Bankr. C.D. Ill. 2003) (refundable portion may be exempt; non-refundable treated differently)
- In re Dever, 250 B.R. 701 (Bankr. D. Idaho 2000) (non-refundable credit not itself payable; refundable portion may be treated as estate asset)