AB 1796, as introduced, Linder. Tax deductions: 529 college savings plans.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2014, would allow as a deduction under that law the lesser of (1) the amount contributed by a qualified taxpayer, as defined, to a qualified tuition program, as provided, or (2) $3,000 in the case of a taxpayer who is single or is a married individual filing a separate return, and $6,000 in the case of a taxpayer who is a married individual filing a joint return or an individual filing a head of household return.
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 17206.2 is added to the Revenue and
2Taxation Code, to read:
(a) For taxable years beginning on or after January
21, 2014, there shall be allowed as a deduction the lesser of the
3amount contributed by a qualified taxpayer during the taxable year
4to a qualified tuition program under Section 529 of the Internal
5Revenue Code, as modified by Section 17140.3, or the applicable
6amount determined under paragraph (2) of subdivision (b).
7(b) For purposes of this section, all of the following apply:
8(1) Section 67(b) of the Internal Revenue Code, relating to the
9definition of miscellaneous itemized deductions, is modified to
10additionally provide that the deduction allowed under this section
11is an itemized deduction that is
not subject to the 2 percent floor
12on itemized deductions under Section 67(a) of the Internal Revenue
13Code.
14(2) The amount allowed as a deduction under subdivision (a)
15shall not exceed the following:
16(A) In the case of a taxpayer who is single or is a married
17individual filing a separate return, three thousand dollars ($3,000).
18(B) In the case of a taxpayer who is a married individual filing
19a joint return or an individual filing a head of household return,
20six thousand dollars ($6,000).
21(3) “Qualified taxpayer” means an individual who, on behalf
22of a beneficiary, contributes money to a qualified tuition program
23and meets all of the other
applicable requirements of Section 529
24of the Internal Revenue Code, as modified by Section 17140.3.
25(c) The deduction under subdivision (a) shall be taken with
26respect to the taxable year in which the contribution is made and
27shall be limited to the applicable dollar amount determined under
28paragraph (2) of subdivision (b).
This act provides for a tax levy within the meaning of
30Article IV of the Constitution and shall go into immediate effect.
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