Bill Text: CA AB2576 | 2013-2014 | Regular Session | Amended
Bill Title: Income tax: health savings accounts.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced - Dead) 2014-05-23 - Joint Rule 62(a), file notice suspended. (Page 5065.) In committee: Set, second hearing. Held under submission. [AB2576 Detail]
Download: California-2013-AB2576-Amended.html
BILL NUMBER: AB 2576 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 22, 2014
INTRODUCED BY Assembly Member Harkey
( Coauthors: Assembly Members
Conway, Hagman, Wagner, and
Wilk )
FEBRUARY 21, 2014
An act to amend Sections 17072 and 19184 of, to amend and repeal
Sections 17131.4, 17131.5, 17215.1, and 17215.4 of, and to add
Sections 17138.5 and Section 17216 to,
the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2576, as amended, Harkey. Income tax: health savings accounts.
The Personal Income Tax Law authorizes various deductions in
computing income that is subject to tax under that law.
This bill would, for taxable years beginning on or after January
1, 2014, allow a deduction in connection with health savings accounts
in conformity with federal law. In general, the deduction would be
an amount equal to the aggregate amount paid in cash during the
taxable year by, or on behalf of, an eligible individual, as defined,
to a health savings account of that individual, as provided. This
bill would, for taxable years beginning on or after January 1, 2014,
also provide related conformity to that federal law with respect to
the allowance of rollovers from Archer Medical Savings Accounts,
health flexible spending arrangements, or health reimbursement
accounts to a health savings account, and penalties in connection
therewith.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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
attorney's fees relating to awards to whistleblowers, shall not
apply.
(d) For taxable years beginning o n or
after January 1, 2014, Section 62(a)(19) of the Internal
Revenue Code, relating to health savings accounts, shall apply, as
modified by Section 17216.
(e) The amendments made to this section by the act adding this
subdivision shall apply only to taxable years beginning on or after
January 1, 2014.
SEC. 2. Section 17131.4 of the Revenue and Taxation Code is
amended to read:
17131.4. (a) Section 106(d) of the Internal Revenue Code,
relating to contributions to health savings accounts, shall not
apply.
(b) This section shall apply to taxable years beginning on or
after January 1, 2005, and before January 1, 2014.
(c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed.
SEC. 3. Section 17131.5 of the Revenue and Taxation Code is
amended to read:
17131.5. (a) Section 125(d)(2)(D) of the Internal Revenue Code,
relating to the exception for health savings
accounts, shall not apply.
(b) This section shall apply to taxable years beginning on or
after January 1, 2005, and before January 1, 2014.
(c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed.
SEC. 4. Section 17138.5 is added to the Revenue
and Taxation Code, to read:
17138.5. For taxable years beginning on or after January 1, 2014,
Section 106 of the Internal Revenue Code, as amended by Section 302
of the federal Tax Relief and Health Care Act of 2006 (Public Law
109-432), relating to health savings accounts, shall apply, except as
otherwise provided.
SEC. 5. SEC. 4. Section 17215.1 of
the Revenue and Taxation Code is amended to read:
17215.1. (a) Section 220(f)(5) of the Internal Revenue Code,
relating to rollover contributions, shall not apply.
(b) This section shall apply to taxable years beginning on or
after January 1, 2005, and before January 1, 2014.
(c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed.
SEC. 6. SEC. 5. Section 17215.4 of
the Revenue and Taxation Code is amended to read:
17215.4. (a) Section 223 of the Internal Revenue Code, relating
to health savings accounts, shall not apply.
(b) This section shall apply to taxable years beginning on or
after January 1, 2005, and before January 1, 2014.
(c) This section shall remain in effect only until January 1,
2019, and as of that date is repealed.
SEC. 7. SEC. 6. Section 17216 is
added to the Revenue and Taxation Code, to read:
17216. For taxable years beginning on or after January 1, 2014,
all of the following shall apply:
(a) Section 223 of the Internal Revenue Code , relating
to health savings accounts , shall apply, except as
otherwise provided.
(b) Section 223(e)(1) of the Internal Revenue Code shall be
modified by substituting the phrase "Section 17651" for the phrase
"Section 511 (relating to imposition of tax of unrelated business
income of charitable, etc., organizations)," contained therein.
(c) Section 223(f)(4)(A) of the Internal Revenue Code shall be
modified by substituting "2.5 percent" for "20 percent,"
"10 percent, " contained therein.
SEC. 8. SEC. 7. Section 19184 of the
Revenue and Taxation Code is amended to read:
19184. (a) A penalty of fifty dollars ($50) shall be imposed for
each failure, unless it is shown that the failure is due to
reasonable cause, by any person required to file who fails to file a
report at the time and in the manner required by any of the following
provisions:
(1) Subdivision (c) of Section 17507, relating to individual
retirement accounts.
(2) Section 220(h) of the Internal Revenue Code, relating to
medical savings accounts reports for
taxable years beginning on or after January 1, 1997.
(3) Section 223(h) of the Internal Revenue Code, relating to
health savings accounts. reports.
(4) Subdivision (b) of Section 17140.3 or subdivision (b) of
Section 23711 relating to qualified tuition programs.
(5) Subdivision (e) of Section 23712, relating to Coverdell
education savings accounts.
(b) (1) Any individual who:
(A) Is required to furnish information under Section 17508 as to
the amount designated nondeductible contributions made for any
taxable year, and
(B) Overstates the amount of those contributions made for that
taxable year, shall pay a penalty of one hundred dollars ($100) for
each overstatement unless it is shown that the overstatement is due
to reasonable cause.
(2) Any individual who fails to file a form required to be filed
by the Franchise Tax Board under Section 17508 shall pay a penalty of
fifty dollars ($50) for each failure unless it is shown that the
failure is due to reasonable cause.
(c) Article 3 (commencing with Section 19031) of this chapter
(relating to deficiency assessments) shall not apply in respect of
the assessment or collection of any penalty imposed under this
section.
(d) The amendments made to this section by the act adding this
subdivision shall apply to taxable years beginning on and after
January 1, 2014.
SEC. 9. SEC. 8. This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.
