Bill Text: CA AB1682 | 2019-2020 | Regular Session | Amended


Bill Title: Personal income taxes: caregiver tax credit.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-04-12 - From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended. [AB1682 Detail]

Download: California-2019-AB1682-Amended.html

Amended  IN  Assembly  April 12, 2019
Amended  IN  Assembly  March 28, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 1682


Introduced by Assembly Member Wicks

February 22, 2019


An act to add and repeal Section 17052.2 to of the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 1682, as amended, Wicks. Personal income taxes: caregiver tax credit.
The Personal Income Tax Law allows various credits against the taxes imposed by that law, including an earned income tax credit against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor, as specified. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill for taxable years beginning on or after January 1, 2019, and before January 1, 2024, would allow to an eligible caregiver, defined to mean an individual eligible to claim an earned income tax credit but who is not required to have earned income and who may claim this credit using a taxpayer identification number or a social security number, who provides uncompensated care for a qualified dependent, as defined, a credit in an amount equal to $1,200. amount of no less than $1,200, as provided. The bill would limit the allowance of this credit to those taxable years in which the earned income tax credit is operative and when the earned income tax credit adjustment factor for a taxable year is not 0%. The bill would additionally require, for taxable years beginning on or after January 1, 2019, and before January 1, 2024, for a taxpayer with an allowable credit in excess of tax liability, a payment from the Tax Relief and Refund Account, a continuously appropriated account, to the taxpayer equal to the amount of the allowable credit that is in excess of tax liability, as provided. By authorizing additional payments from this account, this bill would make an appropriation. The bill also would include additional information required for any bill authorizing a new income tax credit.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17052.2 is added to the Revenue and Taxation Code, to read:

17052.2.
 (a) (1) For each taxable year beginning on or after January 1, 2019, and before January 1, 2024, there shall be allowed against the “net tax,” as defined by Section 17039, to an eligible caregiver, a caregiver tax credit in an amount equal to of no less than one thousand two hundred dollars ($1,200), except as otherwise provided by this section.
(2) The caregiver tax credit authorized by this section shall only be operative for taxable years for which the earned income tax credit, allowed pursuant to Section 17052, is operative and the earned income tax credit adjustment factor for a taxable year for that credit is not 0 percent.
(3) The credit amount allowed shall be not less than one thousand two hundred dollars ($1,200) regardless of how many qualified dependents the eligible caregiver provides care for. The credit amount allowed per taxpayer per taxable year shall be determined as follows:
(A) If the credit amount allowed pursuant to Section 17052 is zero dollars ($0), the credit amount allowed pursuant to this section shall be one thousand two hundred dollars ($1,200).
(B) If the credit amount allowed pursuant to Section 17052 is more than zero dollars ($0) and less than one thousand two hundred dollars ($1,200), the credit amount allowed pursuant to this section shall be an amount such that the total amount of credit allowed to a taxpayer under both sections is equal to one thousand two hundred dollars ($1,200).
(C) If the credit amount allowed pursuant to Section 17052 is one thousand two hundred dollars ($1,200) or more, the credit amount allowed pursuant to this section shall be zero dollars ($0).
(b) For purposes of this section:
(1) “Eligible caregiver” means a taxpayer who provides uncompensated care for a qualified dependent, and who would otherwise meet the requirements of an eligible individual pursuant to Section 17052, except as follows:
(A) An eligible caregiver is not required to have earned income for the taxable year. If the taxpayers are spouses filing jointly, the eligible caregiver shall have an earned income of zero ($0) dollars.
(B) The eligible caregiver or the qualified dependent, or both, may have a taxpayer identification number that is a social security number or is a federal individual taxpayer identification number.
(2) “Qualified dependent” means any of the following:
(A) A qualifying child, as that term is used in Section 17052, under six years of age during the taxable year in which the credit is claimed.
(B) A dependent for whom a deduction is allowed under Section 151 of the Internal Revenue Code, relating to allowance of deductions for personal exemptions, 70 years of age or older during the taxable year in which the credit is claimed.
(C) An individual described in Section 21(b)(1)(B) or Section 21(b)(1)(C) of the Internal Revenue Code. of the Internal Revenue Code, modified so that the reference to subsection (b)(1) shall not apply.
(D) An individual described in Section 21(b)(1)(C) of the Internal Revenue Code.
(c) Where the qualifying dependent is an individual described in subparagraph (B) of paragraph (2) of subdivision (b), the tax return claiming the credit allowed by this section shall include the name, year of birth, and taxpayer identification number of that qualifying dependent.
(d) For taxable years beginning on or after January 1, 2019, and before January 1, 2024, if the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the taxpayer.
(e) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(f) Notwithstanding any other law, amounts refunded pursuant to this section shall be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits under Division 9 (commencing with Section 10000) of the Welfare and Institutions Code or amounts of those benefits.

(g)For purposes of Section 41, the Franchise Tax Board shall include the credit allowed by this section in the annual report required by subdivision (j) of Section 17052, where applicable.

(g) For the purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares as follows:
(1) The purpose of the Earned Income Tax Credit is to reduce poverty by providing a refundable tax credit to California’s lowest-income working families and individuals.
(2) The specific purpose of this act is to expand eligibility for the Earned Income Tax Credit by including unpaid caregiving as work. Because caregiving is work, even though it may not be compensated in the formal economy, providing care for a qualifying child, elderly adult, or adult with disabilities becomes eligible for the Earned Income Tax Credit under this act.
(3) To measure whether the credit achieves its intended purpose, the Franchise Tax Board shall annually prepare a written report on the following:
(A) The number of tax returns claiming the credit.
(B) The number of individuals represented on tax returns claiming the credit.
(C) The average credit amount on tax returns claiming the credit.
(D) The distribution of credits by number of dependents and income ranges. The income ranges shall encompass the phase-in and phaseout ranges of the credit.
(E) Using data from tax returns claiming the credit, including an estimate of the federal tax credit determined under Section 32 of the Internal Revenue Code, relating to earned income, an estimate of the number of families who are lifted out of deep poverty by the credit and an estimate of the number of families who are lifted out of deep poverty by the combination of the credit and the federal tax credit. For the purposes of this subparagraph, a family is in “deep poverty” if the income of the family is less than 50 percent of the federal poverty threshold.
(4) The Franchise Tax Board shall provide the written report to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, the Assembly Committee on Revenue and Taxation, and the Senate and Assembly Committees on Human Services. A report submitted pursuant this paragraph shall be submitted in compliance with Section 9795 of the Government Code.
(h) This section shall remain in effect only until December 1, 2024, and as of that date is repealed.

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