Bill Text: CA SB1352 | 2017-2018 | Regular Session | Amended


Bill Title: Personal income taxes: credit: ABLE account contributions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2018-05-17 - Set for hearing May 22. [SB1352 Detail]

Download: California-2017-SB1352-Amended.html

Amended  IN  Senate  May 15, 2018
Amended  IN  Senate  March 22, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1352


Introduced by Senator Stone

February 16, 2018


An act to amend Section 17072 of, and to add Sections 17209, 17210, and 17211 to, add and repeal Section 17053.32 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1352, as amended, Stone. Personal income taxes: deductions. credit: ABLE account contributions.
The Personal Income Tax Law allows various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2019, and before January 1, 2024, in an amount equal to 20% of a qualified contribution, as defined, paid or incurred by a taxpayer during the taxable year, not to exceed $750.

The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law, including deductions for payments to individual retirement accounts, alimony payments, and interest on educational loans.

This bill, for each taxable year beginning on or after January 1, 2019, would allow to qualified taxpayers, as defined, a deduction from gross income for qualified expenses related to the care of a dependent parent or stepparent. The bill would also, for each taxable year beginning on or after January 1, 2019, allow to qualified taxpayers, as defined, a deduction from gross income for qualified expenses related to the care of a dependent child, as defined. The bill would additionally, for each taxable year beginning on or after January 1, 2019, allow to qualified taxpayers, as defined, a deduction from gross income for amounts contributed to a trust fund to pay for the care and medical expenses of a dependent child or dependent parent or stepparent, as provided.

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 17053.32 is added to the Revenue and Taxation Code, to read:

17053.32.
 (a) For each taxable year beginning on or after January 1, 2019, and before January 1, 2024, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 20 percent of a qualified contribution paid or incurred by a taxpayer during the taxable year, not to exceed seven hundred fifty dollars ($750).
(b) For purposes of this section, “qualified contribution” means a contribution made to an ABLE account established pursuant to Chapter 15 (commencing with Section 4875) of Division 4.5 of the Welfare and Institutions Code, excluding tax-free rollovers.
(c) If the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and the succeeding four years if necessary, until the credit is exhausted.
(d) Any deduction or credit otherwise allowed pursuant to this part for any amount contributed by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(e) In accordance with Section 41, the purpose of this credit is to increase contributions to ABLE accounts. To measure whether the credit achieves its intended purpose, the Franchise Tax Board shall annually report the number of tax returns claiming the credit and the average credit amount on tax returns claiming the credit.
(f) This section shall remain in effect only until December 1, 2024, and as of that date is repealed.

SEC. 2.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
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 attorneys fees relating to awards to whistleblowers, shall not apply.

(d)For each taxable year beginning on or after January 1, 2019, Section 62(a) of the Internal Revenue Code is modified to provide that the deductions under Sections 17209, 17210, and 17211 shall be allowed in determining adjusted gross income.

SEC. 2.Section 17209 is added to the Revenue and Taxation Code, to read:
17209.

(a)For each taxable year beginning on or after January 1, 2019, there shall be allowed as a deduction an amount equal to the qualified expenses paid or incurred during the taxable year by a qualified taxpayer for the care of the qualified taxpayer’s dependent parent or stepparent.

(b)For purposes of this section:

(1)“Dependent parent or stepparent” means the parent or stepparent of a qualified taxpayer who can no longer care for himself or herself, as documented by a health care professional, including, but not limited to, an allopathic physician, an osteopathic physician, or a registered nurse practitioner.

(2)“Qualified expenses” mean those expenses for the care of the qualified taxpayer’s dependent parent or stepparent that are greater than five thousand dollars ($5,000) and do not exceed thirty thousand dollars ($30,000).

(3)“Qualified taxpayer” means:

(A)Taxpayers who filed as married individuals filing a joint return, filed a head of household return, or filed as a surviving spouse, who have a gross income for the taxable year of no more than two hundred fifty thousand dollars ($250,000).

(B)A taxpayer who filed as a single taxpayer or filed as a married individual filing a separate return, who has a gross income for the taxable year of no more than one hundred twenty five thousand dollars ($125,000).

(c)For each taxable year beginning on or after January 1, 2020, the Franchise Tax Board shall recompute the gross income amounts and qualified expenses amounts prescribed in subdivision (b) in the manner described in subdivision (h) of Section 17041, except that the amounts should be adjusted to the nearest one hundred dollars ($100). If the gross income amount or qualified expenses amount ends in fifty dollars ($50), the amount shall be rounded up to the nearest one hundred dollars ($100).

SEC. 3.Section 17210 is added to the Revenue and Taxation Code, to read:
17210.

(a)For each taxable year beginning on or after January 1, 2019, there shall be allowed as a deduction an amount equal to the qualified expenses paid or incurred during the taxable year by a qualified taxpayer for the care of the qualified taxpayer’s dependent child.

(b)For purposes of this section:

(1)“Dependent child” means the child, stepchild, or a child of whom the qualified taxpayer is the guardian who is a child with special needs, including, but not limited to, a child with Down syndrome, Asperger syndrome, autism, or cerebral palsy.

(2)“Qualified expenses” mean those expenses for the care of the qualified taxpayer’s child that are greater than five thousand dollars ($5,000) and do not exceed thirty thousand dollars ($30,000).

(3)“Qualified taxpayer” means:

(A)Taxpayers who filed as married individuals filing a joint return, filed a head of household return, or filed as a surviving spouse, who have a gross income for the taxable year of no more than two hundred fifty thousand dollars ($250,000).

(B)A taxpayer who filed as a single taxpayer or filed as a married individual filing a separate return, who has a gross income for the taxable year of no more than one hundred twenty five thousand dollars ($125,000).

(c)For each taxable year beginning on or after January 1, 2020, the Franchise Tax Board shall recompute the gross income amounts and qualified expenses amounts prescribed in subdivision (b) in the manner described in subdivision (h) of Section 17041, except that the amounts should be adjusted to the nearest one hundred dollars ($100). If the gross income amount or qualified expenses amount ends in fifty dollars ($50), the amount shall be rounded up to the nearest one hundred dollars ($100).

SEC. 4.Section 17211 is added to the Revenue and Taxation Code, to read:
17211.

(a)(1)For each taxable year beginning on or after January 1, 2019, there shall be allowed as a deduction an amount equal to contributions made by a qualified taxpayer during the taxable year to a qualified trust fund.

(2)The deduction allowed by this section shall not exceed thirty thousand dollars ($30,000) per taxable year.

(b)For purposes of this section:

(1)“Dependent child” means a child with special needs, including, but not limited to, a child with Down syndrome, Asperger syndrome, autism, or cerebral palsy.

(2)“Dependent parent or stepparent” means the parent or stepparent of a qualified taxpayer who can no longer care for himself or herself, as documented by a health care professional, including, but not limited to, an allopathic physician, an osteopathic physician, or a registered nurse practitioner.

(3)“Qualified taxpayer” means a parent, stepparent, guardian, or grandparent of a dependent child, or the child or stepchild of a dependent parent or stepparent.

(4)“Qualified trust fund” means a trust fund established to pay for the care, as recommended by a health care professional, and medical expenses of a dependent child or dependent parent or stepparent.

(c)For each taxable year beginning on or after January 1, 2020, the Franchise Tax Board shall recompute the deduction limit prescribed in paragraph (2) of subdivision (a) in the manner described in subdivision (h) of Section 17041, except that the limit should be adjusted to the nearest one hundred dollars ($100). If the limit amount ends in fifty dollars ($50), the amount shall be rounded up to the nearest one hundred dollars ($100).

SEC. 5.

This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

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