BILL NUMBER: SB 693 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 8, 2014
AMENDED IN SENATE JANUARY 6, 2014
AMENDED IN SENATE APRIL 11, 2013
INTRODUCED BY Senator Correa
FEBRUARY 22, 2013
An act to add and repeal Sections 17052.5, 17052.7, and
17158 Se ction 17052.7 of the Revenue
and Taxation Code, relating to taxation, to take effect immediately,
tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 693, as amended, Correa. Personal income tax: credits:
exclusions: school expenses. qualified teachers.
The Personal Income Tax Law imposes a tax based upon
gross income, and defines gross income as all income from whatever
source derived, unless specifically excluded. The Personal Income Tax
Law allows various credits against the tax imposed by that
law.
This bill would, for taxable years beginning on or after January
1, 2014, and before January 1, 2019, allow either an
exclusion from gross income or a credit against that tax to qualified
parents and guardians, as defined, for education-related expenses,
as defined, in specified amounts. This bill would also allow
a credit against that tax for amounts paid or incurred
by a qualified teachers teacher
, as defined, for instructional materials and classroom supplies,
as defined, not to exceed $250.
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. 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) State tax relief for education 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.
(c)
(b) State tax relief for education expenses, leveraged
with current federal deductions, can further support and strengthen
new teachers for successful careers in their noble profession.
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, 2014, and before January 1, 2019, there shall be allowed as a
credit against the "net tax," as defined in Section 17039, the
qualified amount that was paid or incurred for qualified
education-related expenses for one or more dependent children by a
qualified parent or guardian 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) "Household income" has the same meaning as "adjusted gross
income," as defined in Section 17072.
(3) "Qualified amount" means the amount paid for incurred for
qualified education expenses.
(4) (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
school day; school uniforms that are not part of a cocurricular
activity; computers, computer hardware, and educational computer
software used to lean academic subjects; tuition for a private school
with kindergarten or any of grades 1 to 12, inclusive, 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; 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 are used in
a trade or business.
(5) "Qualified parent or guardian" 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) The household income does not exceed 200 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.
(c) The total amount of credit available pursuant to this section
per qualified parent or guardian shall not exceed five hundred
dollars ($500) per taxable year, except as provided in paragraphs (1)
and (2).
(1) If the qualified parent or guardian is a married individual, a
credit pursuant to this section shall be allowed only if the
qualified parent or guardian and the qualified parent or guardian's
spouse file a joint return for the taxable year in which the credit
is claimed.
(2) If qualified parents or guardians file individual returns, the
total combined credit amount allowed pursuant to this section on
both returns shall not exceed five hundred dollars ($500).
(d) In the case where 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 succeeding four years if necessary, until
the credit is exhausted.
(e) (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.
(f) (1) The credit allowed by this section shall be in lieu of any
exclusion allowed by Section 17158.
(2) The credit allowed by this section shall not be allowed by for
any expense incurred by a qualified teacher for instructional
material and classroom supplies, as defined by Section 17052.7.
(g) This section shall remain in effect only until December 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
SEC. 3. SEC. 2. Section 17052.7 is
added to the Revenue and Taxation Code, to read:
17052.7. (a) (1) For each taxable year beginning on or after
January 1, 2014, and before January 1, 2019, there shall be allowed
as a credit against the "net tax," as defined in Section 17039, an
amount equal to the amount paid or incurred by a qualified teacher
during the taxable year for instructional materials and classroom
supplies, not to exceed two hundred fifty dollars ($250), except as
provided in paragraph (2).
(2) Subject to the maximum credit amount allowed per qualified
teacher, for qualified teachers who are married and filing a joint
return there shall be allowed a credit not to exceed five hundred
dollars ($500).
(b) For purposes of this section:
(1) "Instructional materials and classroom supplies" means any
unreimbursed expenses, otherwise deductible as a trade or business
expense, for books, supplies, computer equipment, including related
software and services and other equipment, and supplementary
materials used in the classroom, including, but not limited to,
supplies for courses in health and physical education.
(2) "Qualified teacher" means a teacher who meets all of the
following requirements:
(A) The individual has worked at least 900 hours in the school
year as a teacher, in a school offering instruction in 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.
(B) The teacher is primarily engaged in the duty of imparting
knowledge to pupils by teaching, instructing, or lecturing.
(C) The teacher customarily and regularly exercises discretion and
independent judgment in performing the duties of a teacher.
(D) The teacher is not employed as a tutor, teaching assistant,
instructional aide, student teacher, day care provider, vocational
instructor, or similar position.
(c) The credit allowed pursuant to this section shall be available
as follows:
(1) For taxable years beginning on or after January 1, 2014, and
before January 1, 2015, the credit shall be available only to
qualified teachers with no more than one year of employment as a
qualified teacher.
(2) For taxable years beginning on or after January 1, 2015, and
before January 1, 2016, the credit shall be available only to
qualified teachers with no more than two consecutive years of
employment as a qualified teacher.
(3) For taxable years beginning on or after January 1, 2016, and
before January 1, 2019, the credit shall be available only to
qualified teachers with no more than three consecutive years of
employment as a qualified teacher.
(d) In the case where 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 succeeding four years if necessary, until
the credit is exhausted.
(e) (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.
(f) The credit allowed by Section 17052.6 shall not be allowed for
any expense incurred by a qualified teacher for instructional
material and classroom supplies, as defined by paragraph (1) of
subdivision (b).
(g)
(f) This section shall remain in effect only until
December 1, 2019, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2019, deletes or
extends that date.
SEC. 4. Section 17158 is added to the Revenue
and Taxation Code, to read:
17158. (a) For each taxable year beginning on or after January 1,
2014, and before January 1, 2019, gross income shall not include the
qualified amount paid or incurred for qualified education-related
expenses for one or more dependent children by a qualified parent or
guardian 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 for incurred for
qualified education expenses.
(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
school day; school uniforms that are not part of a cocurricular
activity; computers, computer hardware, and educational computer
software used to lean academic subjects; tuition for a private school
with kindergarten or any of grades 1 to 12, inclusive, 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; 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 are used in
a trade or business.
(4) "Qualified parent or guardian" 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) The household income does not exceed 200 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.
(c) The total qualified amount excluded from gross income shall
not exceed two thousand five hundred dollars ($2,500) per taxable
year per qualified parent or guardian, except as provided in
paragraphs (1) and (2).
(1) If the qualified parent or guardian is a married individual,
an exclusion pursuant to this section shall be allowed only if the
qualified parent or guardian and the qualified parent or guardian's
spouse file a joint return for the taxable year in which the
exclusion is claimed.
(2) If qualified parents or guardians file individual returns, the
total combined exclusion amount allowed pursuant to this section on
both returns shall not exceed two thousand five hundred dollars
($2,500).
(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) The exclusion allowed by this section shall be in lieu of any
credit allowed by Section 17052.5.
(f) This section shall remain in effect only until December 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date.
SEC. 5. SEC. 3. This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.