Bill Text: CA AB1629 | 2021-2022 | Regular Session | Amended

California Assembly Bill 1629 (Prior Session Legislation)

Bill Title: Income taxation: exclusion: military survivor benefits.

Spectrum: Partisan Bill (Republican 12-0)

Status: (Introduced - Dead) 2022-04-04 - In committee: Set, second hearing. Hearing canceled at the request of author. [AB1629 Detail]

Download: California-2021-AB1629-Amended.html

Amended IN Assembly February 28, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1629

Introduced by Assembly Members Seyarto, Choi, and Mathis
(Principal coauthor: Assembly Member Voepel)
(Coauthors: Assembly Members Chen, Fong, Gallagher, Lackey, Nguyen, Smith, Valladares, and Waldron)

January 11, 2022

An act to add and repeal Section 17140.6 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 1629, as amended, Seyarto. Income taxation: exclusion: military survivor benefits.

The Personal Income Tax Law, in modified conformity with federal law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill, for taxable years beginning on or after January 1, 2022, and before January 1, 2027, would provide an exclusion from gross income for survivor benefits or payments, not to exceed $20,000 per ~~calendar~~ taxable year, received on or after January 1, ~~2022,~~ 2021, and before January 1, 2027, under the federal Survivor Benefit Plan. The bill would require the Franchise Tax Board to submit, on or before June 15, 2025, a report to the Legislature on the income brackets of taxpayers who claimed this exclusion, and would provide findings and declarations relating to the goals, purposes, and objectives of this exclusion.

This bill would take effect immediately as a tax levy.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 17140.6 is added to the Revenue and Taxation Code, to read:

17140.6.

(a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include survivor benefits or payments, not to exceed twenty thousand dollars ($20,000) per ~~calendar~~ taxable year, received on or after January 1, 2021, and before January 1, 2027, under a Survivor Benefit Plan established pursuant to Subchapter II (commencing with Section 1447) of Chapter 73 of Part II of Subtitle A of Title 10 of the United States Code, relating to survivor benefit plans.

~~(b)(1)For the purposes of complying with Section 41, the Legislature finds and declares that the goals, purposes, and objectives of this exclusion are both of the following:~~
~~(A)To recognize the loss and sacrifice of our military families and give them the support that our community owes them.~~
(B)To provide some financial relief to families that have experienced not only the loss of a loved one, but also often the loss of the sole income of the family, and who are now trying to make ends meet on a portion of that original income.
(2)The Legislature shall use income reporting for the exclusion provided by the Franchise Tax Board as performance indicators to measure whether the exclusion meets the goals, purposes, and objectives stated in paragraph (1).
(3)The Franchise Tax Board shall determine the income brackets of individuals who claimed the exclusion allowed by this section, the total number of claims for the exclusion, and the amount claimed for each exclusion, and shall provide that information to the Legislature in an annual report, submitted on or before June 15, 2025, and pursuant to Section 9795 of the Government Code, to assist the Legislature in determining whether the exclusion is helping families that are financially struggling through the loss of a service member or veteran.
~~(4)The disclosure provisions of this subdivision shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2.~~
~~(c)~~

(b) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.

SEC. 2.

(a) (1) For the purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares that the goals, purposes, and objectives of the exclusion under Section 17140.6 of the Revenue and Taxation Code, as added by this act, are both of the following:

(A) To recognize the loss and sacrifice of our military families and give them the support that our community owes them.
(B) To provide some financial relief to families that have experienced not only the loss of a loved one, but also often the loss of the sole income of the family, and who are now trying to make ends meet on a portion of that original income.
(2) The performance indicators to measure whether the exclusion meets the goals, purposes, and objectives stated in paragraph (1) are as follows:
(A) The number of taxpayers excluding income from survivor benefit plans pursuant to Section 17140.6 of the Revenue and Taxation Code.
(B) The total dollar amount of income excluded pursuant to Section 17140.6 of the Revenue and Taxation Code.
(C) The total number of taxpayers in each tax bracket who excluded income pursuant to Section 17140.6 of the Revenue and Taxation Code.
(3) The Franchise Tax Board shall have the following data collection and reporting requirements:
(A) Collect data on the number of taxpayers excluding income from survivor benefit plans pursuant to Section 17140.6 of the Revenue and Taxation Code.
(B) Collect data on the total dollar amount of income excluded pursuant to Section 17140.6 of the Revenue and Taxation Code.
(C) Collect data on the total number of taxpayers in each tax bracket who excluded income pursuant to Section 17140.6 of the Revenue and Taxation Code.
(b) (1) By March 1, 2024, and on or before each March 1 thereafter, the Franchise Tax Board shall provide the data required by subdivision (a) in a report to the Legislature for each calendar year in which the exclusion under Section 17140.6 of the Revenue and Taxation Code, as added by this act, is allowed. The report shall be submitted in compliance with Section 9795 of the Government Code.
(2) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542.