Amended  IN  Senate  June 09, 2022
Amended  IN  Assembly  May 19, 2022
Amended  IN  Assembly  April 19, 2022
Amended  IN  Assembly  March 24, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1863

Introduced by Assembly Member Irwin

February 08, 2022

An act to add and repeal Section 19586 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 1863, as amended, Irwin. Income tax: CalFile: online tax filing. filing: Volunteer Income Tax Assistance.
Existing law requires the Franchise Tax Board to make available to taxpayers tax forms to allow taxpayers to file returns under the Personal Income Tax Law and Corporation Tax Law. The Franchise Tax Board allows taxpayers to file their taxes through the Franchise Tax Board’s internet website via the CalFile program.
Existing law, beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows 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.
This bill would, beginning January 1, 2023, require the Franchise Tax Board to notify potential eligible individuals, as defined, of available paperless filing options offered through the Franchise Tax Board, including the CalFile program. program and free tax preparation services, including the Volunteer Income Tax Assistance program. The bill would require these notifications to include information about the California Earned Income Tax Credit. The bill would require the Franchise Tax Board to submit a report on or before January 1, 2026, relating to the costs, efficacy, and savings realized based on these notification requirements, as provided.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 19586 is added to the Revenue and Taxation Code, to read:

19586.
 (a) (1) Beginning January 1, 2023, the Franchise Tax Board shall notify all potential eligible individuals of available paperless filing options offered through the Franchise Tax Board, including the CalFile program. program and free tax preparation services, including the Volunteer Income Tax Assistance program. Notifications shall contain information about available paperless filing options and information about the CalEITC.
(2) Notifications shall be in any form and manner, including electronic communication, determined by the Franchise Tax Board to incentivize potential eligible individuals to timely file federal and state tax returns.
(3) The Franchise Tax Board may coordinate the notifications with other government entities and nonprofit organizations to improve the efficacy and impact of the notifications.
(b) A negative inference shall not be drawn from a taxpayer’s decision not to file a return using the CalFile program or to file a return under a different method.
(c) For purposes of this section, the following definitions shall apply:
(1) “CalEITC” means the California Earned Income Tax Credit allowed under Section 17052.
(2) “Potential eligible individual” means a taxpayer that was an eligible individual for purposes of the CalEITC in any of the three previous taxable years based on the information available to the Franchise Tax Board.
(d) On or before January 1, 2026, the Franchise Tax Board shall submit, pursuant to Section 9795 of the Government Code, a report to the Legislature that contains all of the following information organized by taxable year for taxable years beginning on or after January 1, 2023, and before January 1, 2025:
(1) The cost to administer and implement the notification requirement under this section.
(2) The total number of tax returns filed using paperless filing options offered through the Franchise Tax Board, including the CalFile program.
(3) An analysis of the discernable efficacy and impact of the notification required under this section.
(4) The number of tax returns filed using paperless filing options offered through the Franchise Tax Board that claimed the CalEITC.
(5) The estimated cost savings potential eligible individuals realized by using paperless filing options offered through the Franchise Tax Board.
(e) This section shall remain in effect only until January 1, 2027, and as of that date is repealed.