AB 17, as introduced, Bonilla. Personal income tax: credit: qualified tuition program.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, allow a credit in the amount of 20% of the monetary contributions made to a qualified tuition program, as defined, by a qualified taxpayer, as defined, not to exceed $500. This bill would provide for the payment of a credit amount in excess of tax liability upon an appropriation by the Legislature for that purpose.
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 17053 is added to the Revenue and
2Taxation Code, to read:
(a) (1) For taxable years beginning on or after January
41, 2016, and before January 1, 2021, there shall be allowed to a
P2 1qualified taxpayer a credit against the “net tax,” as defined in
2Section 17039, in an amount as determined by paragraph (2).
3(2) The credit amount allowed pursuant to this section shall be
4the lesser of the following:
5(A) Twenty percent of the monetary contributions made by a
6qualified taxpayer to a qualified tuition program that the qualified
7taxpayer owns during the taxable year.
8(B) Five hundred dollars ($500).
9(b) For the purposes of this section:
10(1) “Nonqualified withdrawal” means any payment or
11distribution from a qualified tuition program that is subject to
12additional tax pursuant to Section 529(c)(6) of the Internal Revenue
13Code, relating to additional tax.
14(2) “Qualified taxpayer” means an individual who, on behalf
15of a beneficiary, contributes money to a qualified tuition program
16for which the individual is the account owner and has one of the
17following annual adjusted gross incomes:
18(A) If the qualified taxpayer’s filing status is single, married
19filing separately, or domestic registered partner filing separately,
20one hundred thousand dollars ($100,000) or less.
21(B) If the qualified taxpayer files as a head of household,
22surviving
spouse, as defined in Section 17046, married filing
23jointly, or domestic partner filing jointly, two hundred thousand
24dollars ($200,000) or less.
25(3) “Qualified tuition program” means a qualified tuition
26program, as defined in Section 529 of the Internal Revenue Code.
27(c) In the case of married taxpayers or registered domestic
28partners who file separate returns, the credit may be taken by either
29spouse or registered domestic partner or divided equally between
30the spouses or registered domestic partners.
31(d) When a qualified taxpayer receives a nonqualified
32withdrawal, in addition to any tax imposed under this part, an
33additional tax shall be imposed in an amount that is the lesser of
3410 percent of that nonqualified withdrawal or the total amount of
35credit allowed under subdivision (a) for the taxable year and all
36
prior taxable years in which the qualified taxpayer was allowed a
37credit pursuant to this section.
38(e) That portion of any credit allowed under this section that is
39in excess of tax liability shall, upon an appropriation by the
40Legislature, be paid to the qualified taxpayer.
P3 1(f) (1) The Franchise Tax Board may prescribe rules, guidelines,
2or procedures necessary or appropriate to carry out the purposes
3of this section.
4(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
5Division 3 of Title 2 of the Government Code does not apply to
6any standard, criterion, procedure, determination, rule, notice, or
7guideline established or issued by the Franchise Tax Board
8pursuant to this section.
9(g) This section shall
remain in effect only until December 1,
102021, and as of that date is repealed.
This act provides for a tax levy within the meaning of
12Article IV of the Constitution and shall go into immediate effect.
O
99