SB 693,
as amended, Correa. Personal income tax: credits:begin delete exclusions: school expenses.end deletebegin insert qualified teachers.end insert
The Personal Income Tax Lawbegin delete 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 Lawend delete 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, allowbegin delete 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 allowend delete a credit against that tax forbegin insert amounts paid or incurred by aend insert qualifiedbegin delete teachersend deletebegin insert teacherend insert, as defined, for instructional materials and classroom supplies,begin insert as defined,end insert 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:
The Legislature finds and declares all of the
2following:
3(a) While ensuring the quality education of all of California’s
4school children is a shared responsibility of the general public, it
5is foremost the duty of individual parents and teachers.
6(b) State tax relief
for education can help empower and engage
7low- and middle-income families in personally caring for their
8own school children’s learning needs, which they know most
9intimately.
10 10(c)
end delete
11begin insert(b)end insert State tax relief for education expenses, leveraged with current
12federal deductions, can further support and strengthen new teachers
13for successful careers in their noble profession.
Section 17052.5 is added to the Revenue and Taxation
15Code, to read:
(a) For each taxable year beginning on or after
17January 1, 2014, and before January 1, 2019, there shall be allowed
18as a credit against the “net tax,” as defined in Section 17039, the
19qualified amount that was paid or incurred for qualified
20education-related expenses for one or more dependent children by
21a qualified parent or guardian during the taxable year.
22(b) For purposes of this section:
23(1) “Dependent
children” means children who attend
24kindergarten or any of grades 1 to 12, inclusive, in California at a
25public, charter, or private school that has a current private school
26affidavit on file with the State Department of Education in the
27taxable year and who meet the requirements of Section
28152(c)(1)(D) and (E) of the Internal Revenue Code.
29(2) “Household income” has the same meaning as “adjusted
30gross income,” as defined in Section 17072.
31(3) “Qualified amount” means the amount paid for incurred for
32qualified education expenses.
33(4) (A) “Qualified education-related expenses” means the
34kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
35and school supplies, including, but not limited to, pens, paper,
36pencils, notebooks, calculators, and rulers; the rental or purchase
37of educational equipment required for classes during the regular
38school day; school uniforms that are not part of a cocurricular
P3 1activity; computers, computer hardware, and educational computer
2software used to lean academic subjects; tuition for a private school
3with kindergarten or any of grades 1 to 12, inclusive, for college
4courses at public
institutions or independent nonprofit colleges,
5or for summer school courses that satisfy high school graduation
6requirements; psychoeducational diagnostic evaluations to assess
7the cognitive and academic abilities of pupils; special education
8and related services for pupils who have an individualized
9education program; out-of-school enrichment programs, tutoring,
10and summer programs that are academic in nature; and public
11transportation or third-party transportation expenses for traveling
12directly to and from school.
13(B) “Qualified education-related expenses” shall not include
14any expenses for the items described in subparagraph (A) that are
15
used in a trade or business.
16(5) “Qualified parent or guardian” means a parent or legal
17guardian of a full-time pupil who is under 21 years of age at the
18close of the school year who meets both of the following
19requirements:
20(A) Both the pupil and the parent or guardian reside in California
21when the qualified education-related expenses
are paid or incurred.
22(B) The household income does not exceed 200 percent of the
23federal Income Eligibility Guidelines published by the Food and
24Nutrition Service of the United States Department of Agriculture
25for use in determining eligibility for reduced price meals.
26(c) The total amount of credit available pursuant to this section
27per qualified parent or guardian shall not exceed five hundred
28dollars ($500) per taxable year, except as provided in paragraphs
29(1) and (2).
30(1) If the qualified parent or guardian is a married individual,
31a credit pursuant to this section shall be allowed only if the
32qualified parent or guardian and the qualified parent or guardian’s
33spouse file a joint return for the taxable year in which the credit
34is claimed.
35(2) If qualified parents or guardians file individual returns, the
36total combined credit amount allowed pursuant to this section on
37
both returns shall not exceed five hundred dollars ($500).
38(d) In the case where the credit allowed by this section exceeds
39the “net tax,” the excess may be carried over to reduce the “net
P4 1tax” in the following year, and succeeding four years if necessary,
2until the credit is exhausted.
3(e) (1) The Franchise Tax Board may prescribe rules, guidelines,
4or procedures necessary or appropriate to carry out the purposes
5of this section.
6(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
7Division 3 of Title 2 of the Government Code shall not apply to
8any standard, criterion, procedure, determination, rule, notice, or
9guideline established or issued by the Franchise Tax Board
10pursuant
to this section.
11(f) (1) The credit allowed by this section shall be in lieu of any
12exclusion allowed by Section 17158.
13(2) The credit allowed by this section shall not be allowed by
14for any expense incurred by a qualified teacher for instructional
15material and classroom supplies, as defined by Section 17052.7.
16(g) This section shall remain in effect only until December 1,
172019, and as of that date is repealed, unless a later enacted statute,
18that is enacted before January 1, 2019, deletes or extends that date.
Section 17052.7 is added to the Revenue and Taxation
21Code, to read:
(a) (1) For each taxable year beginning on or after
23January 1, 2014, and before January 1, 2019, there shall be allowed
24as a credit against the “net tax,” as defined in Section 17039, an
25amount equal to the amount paid or incurred by a qualified teacher
26during the taxable year for instructional materials and classroom
27supplies, not to exceed two hundred fifty dollars ($250), except
28as provided in paragraph (2).
29(2) Subject to the maximum credit amount allowed per qualified
30teacher, for qualified teachers who are married and filing a joint
31return there shall be allowed a credit not to exceed five hundred
32dollars ($500).
33(b) For purposes of this section:
34(1) “Instructional materials and classroom supplies” means any
35unreimbursed expenses, otherwise deductible as a trade or business
36expense, for books, supplies, computer equipment, including
37related software and services and other equipment, and
38supplementary materials used in the classroom, including, but not
39limited to, supplies for courses in health and physical education.
P5 1(2) “Qualified teacher” means a teacher who meets all of the
2following requirements:
3(A) The individual has worked at least 900 hours in the school
4year as a teacher, in a school offering instruction in kindergarten
5or any of grades 1 to 12, inclusive, in
California at a public, charter,
6or private school that has a current private school affidavit on file
7with the State Department of Education in the taxable year.
8(B) The teacher is primarily engaged in the duty of imparting
9knowledge to pupils by teaching, instructing, or lecturing.
10(C) The teacher customarily and regularly exercises discretion
11and independent judgment in performing the duties of a teacher.
12(D) The teacher is not employed as a tutor, teaching assistant,
13instructional aide, student teacher, day care provider, vocational
14instructor, or similar position.
15(c) The credit allowed pursuant to this section shall be available
16as follows:
17(1) For taxable years beginning on or after January 1, 2014, and
18before January 1, 2015, the credit shall be available only to
19qualified teachers with no more than one year of employment as
20a qualified teacher.
21(2) For taxable years beginning on or after January 1, 2015, and
22before January 1, 2016, the credit shall be available only to
23qualified teachers with no more than two consecutive years of
24employment as a qualified teacher.
25(3) For taxable years beginning on or after January 1, 2016, and
26before January 1, 2019, the credit shall be available only to
27qualified teachers with no more than three consecutive years of
28employment as a qualified teacher.
29(d) In the case where the credit allowed by this section exceeds
30the “net tax,” the excess may be carried over to reduce the “net
31tax” in the following year, and succeeding four years if necessary,
32until the credit is exhausted.
33(e) (1) The Franchise Tax Board may prescribe rules, guidelines,
34or procedures necessary or appropriate to carry out the purposes
35of this section.
36(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
37Division 3 of Title 2 of the Government Code shall not apply to
38any standard, criterion, procedure, determination, rule, notice, or
39guideline established or issued by the Franchise Tax Board
40pursuant to this section.
P6 1(f) The credit allowed by Section 17052.6 shall not be allowed
2for any expense incurred by a qualified teacher for instructional
3material and classroom supplies, as defined by paragraph (1) of
4subdivision (b).
20 5(g)
end delete
6begin insert(f)end insert This section shall remain in effect only until December 1,
72019, and as of that date is repealed, unless a later enacted statute,
8that is enacted before January 1, 2019, deletes or extends that date.
Section 17158 is added to the Revenue and Taxation
10Code, to read:
(a) For each taxable year beginning on or after January
121, 2014, and before January 1, 2019, gross income shall not include
13the qualified amount paid or incurred for qualified
14education-related expenses for one or more dependent children by
15a qualified parent or guardian during the taxable year.
16(b) For purposes of this section:
17(1) “Dependent children” means children who attend
18kindergarten or any of grades 1 to 12, inclusive, in California at a
19public, charter, or private school that has a current private school
20affidavit on file with the State Department of Education in the
21taxable year and who meet the requirements of Section
22152(c)(1)(D) and (E) of the Internal Revenue
Code.
23(2) “Qualified amount” means the amount paid for incurred for
24qualified education expenses.
25(3) (A) “Qualified education-related expenses” means the
26kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
27and school supplies, including, but not limited to, pens, paper,
28pencils, notebooks, calculators, and rulers; the rental or purchase
29of educational equipment required for classes during the regular
30school day; school uniforms that are not part of a cocurricular
31activity; computers, computer hardware, and educational computer
32software used to lean academic subjects; tuition for a private school
33with kindergarten or any of grades 1 to 12, inclusive, for college
34courses at public institutions or independent nonprofit colleges,
35or for summer school courses that satisfy high school graduation
36requirements; psychoeducational diagnostic
evaluations to assess
37the cognitive and academic abilities of pupils; special education
38and related services for pupils who have an individualized
39education program; out-of-school enrichment programs, tutoring,
40and summer programs that are academic in nature; and public
P7 1transportation or third-party transportation expenses for traveling
2directly to and from school.
3(B) “Qualified education-related expenses” shall not include
4any expenses for the items described in subparagraph (A) that are
5used in a trade or business.
6(4) “Qualified parent or guardian” means a parent or legal
7guardian of a full-time pupil who is under 21 years of age at the
8close of the school year who meets both of the following
9requirements:
10(A) Both the pupil and the parent or guardian reside in California
11when the qualified education-related
expenses are paid or incurred.
12(B) The household income does not exceed 200 percent of the
13federal Income Eligibility Guidelines published by the Food and
14Nutrition Service of the United States Department of Agriculture
15for use in determining eligibility for reduced price meals.
16(c) The total qualified amount excluded from gross income shall
17not exceed two thousand five hundred dollars ($2,500) per taxable
18year per qualified parent or guardian, except as provided in
19paragraphs (1) and (2).
20(1) If the qualified parent or guardian is a married individual,
21an exclusion pursuant to this section shall be allowed only if the
22qualified parent or guardian and the qualified parent or guardian’s
23spouse file a joint return for the taxable year in which the exclusion
24is claimed.
25(2) If qualified parents or guardians file individual returns, the
26total combined exclusion amount allowed pursuant to this section
27on both returns shall not exceed two thousand five hundred dollars
28($2,500).
29(d) (1) The Franchise Tax Board may prescribe rules,
30guidelines, or procedures necessary or appropriate to carry out the
31purposes of this section.
32(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
33Division 3 of Title 2 of the Government Code shall not apply to
34any standard, criterion, procedure, determination, rule, notice, or
35guideline established or issued by the Franchise Tax Board
36pursuant to this section.
37(e) The exclusion allowed by this section shall be in lieu of any
38credit allowed by Section 17052.5.
P8 1(f) This section shall remain in effect only until December 1,
22019, and as of that date is repealed, unless a later enacted statute,
3that is enacted before January 1, 2019, deletes or extends that date.
This act provides for a tax levy within the meaning of
6Article IV of the Constitution and shall go into immediate effect.
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