Bill Text: CA AB1786 | 2013-2014 | Regular Session | Amended
Bill Title: Personal income taxes: deduction: education expenses.
Sponsorship: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2014-05-13 - In committee: Set, first hearing. Referred to REV. & TAX. suspense file. [AB1786 Detail]
Download: California-2013-AB1786-Amended.html
BILL NUMBER: AB 1786 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 1, 2014
INTRODUCED BY Assembly Member Olsen
( Principal coauthor: Assembly Member
Perea )
(Coauthor: Senator Correa)
FEBRUARY 18, 2014
An act to amend Section 17072 of, and to add and repeal
Section 17052.5 of, the Revenue and Taxation Code, relating to
taxation , to take effect immediately, tax levy .
LEGISLATIVE COUNSEL'S DIGEST
AB 1786, as amended, Olsen. Income
Personal income taxes: credit.
deduction: education expenses.
The Personal Income Tax Law allows various credits against
the taxes imposed by those laws. deductions in
computing income that is subject to tax under that law.
This bill , for taxable years on or after January 1, 2015,
and before January 1, 2020, would state that it is the
intent of the Legislature to enact legislation that would allow a
credit against the taxes imposed by the Personal Income Tax Law or
allow a deduction from gross income , not
to exceed $2,500, for the cost of education-related expenses of
the taxpayer's dependent child or children attending
public or private school , as specified .
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) While ensuring the quality education of all of California's
school children is a shared responsibility of the general public, it
is foremost the duty of individual parents and teachers.
(b) Providing tax relief for citizens who shoulder an extra weight
in pursuit of the common good has long been considered sound public
policy.
(c) Every school year, kindergarten and grades 1 to 12, inclusive,
parents across California pay at their own expense to obtain vital
educational resources and services that are essential to those
children entrusted to their parents' care.
(d) State education tax relief can help empower and engage low-
and middle-income families in personally caring for their own school
children's learning needs, which they know most intimately.
SEC. 2. Section 17052.5 is added to the
Revenue and Taxation Code , to read:
17052.5. (a) For each taxable year beginning on or after January
1, 2015, and before January 1, 2020, there shall be allowed as a
deduction an amount equal to the qualified amount that was paid or
incurred for qualified education-related expenses for one or more
dependent children by a qualified taxpayer during the taxable year.
(b) For purposes of this section:
(1) "Dependent children" means children who attend kindergarten or
any of grades 1 to 12, inclusive, in California at a public,
charter, or private school that has a current private school
affidavit on file with the State Department of Education in the
taxable year and who meet the requirements of Section 152(c)(1)(D)
and (E) of the Internal Revenue Code.
(2) "Qualified amount" means the amount paid or incurred for
qualified education-related expenses, not to exceed the amount
specified in subdivision (c).
(3) (A) "Qualified education-related expenses" means the
kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
and school supplies, including, but not limited to, pens, paper,
pencils, notebooks, calculators, and rulers; the rental or purchase
of educational equipment required for classes during the regular
schoolday; school uniforms that are not part of a cocurricular
activity; computers, computer hardware, and educational computer
software used to learn academic subjects; fees for college courses at
public institutions or independent nonprofit colleges, or for summer
school courses that satisfy high school graduation requirements;
psychoeducational diagnostic evaluations to assess the cognitive and
academic abilities of pupils; special education and related services
for pupils who have an individualized education program or its
equivalent; out-of-school enrichment programs, tutoring, and summer
programs that are academic in nature; and public transportation or
third-party transportation expenses for traveling directly to and
from school.
(B) "Qualified education-related expenses" shall not include any
expenses for the items described in subparagraph (A) that also are
used in a trade or business.
(4) "Qualified taxpayer" means a parent or legal guardian of a
full-time pupil who is under 21 years of age at the close of the
school year who meets both of the following requirements:
(A) Both the pupil and the parent or guardian reside in California
when the qualified education-related expenses are paid or incurred.
(B) (i) The household income does not exceed 300 percent of the
federal Income Eligibility Guidelines published by the Food and
Nutrition Service of the United States Department of Agriculture for
use in determining eligibility for reduced price meals.
(ii) Household income means gross income as defined in Section 61
of the Internal Revenue Code.
(c) The total deduction allowed under this section to a qualified
taxpayer shall not exceed two thousand five hundred dollars ($2,500)
in a taxable year. If more than one qualified taxpayer may be allowed
this deduction for a dependent child, the sum of all deductions
allowed under this section for that dependent child shall not exceed
two thousand five hundred dollars ($2,500) in a taxable year.
(d) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section.
(2) 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
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
(e) This section shall remain in effect only until December 1,
2020, and as of that date is repealed.
SEC. 3. Section 17072 of the Revenue
and Taxation Code is amended to read:
17072. (a) Section 62 of the Internal Revenue Code, relating to
adjusted gross income defined, shall apply, except as otherwise
provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to
certain expenses of elementary and secondary school teachers, shall
not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to
attorneys fees relating to awards to whistleblowers, shall not apply.
(d) For taxable years beginning on or after January 1, 2015, and
before January 1, 2020, the deduction allowed by Section 17052.5,
relating to qualified education-related expenses, shall apply.
SEC. 4. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
SECTION 1. It is the intent of the Legislature
to enact legislation to allow a credit against the taxes imposed by
the Personal Income Tax Law or a deduction from gross income for the
cost of education-related expenses of the taxpayer's dependent child
attending public or private school by allowing a nonrefundable credit
in the amount of $500 to families with income of 200 percent or less
of the federal Reduced Price Lunch Program guidelines, and allowing
a deduction from gross income in the amount of $2,500 to families
with income of more than 200 percent and 300 percent or less of the
federal Reduced Price Lunch Program guidelines.
