AB 17, as amended, Bonilla. Personal income taxes: credit: qualified tuition program.
The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill would, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, allow a credit under the Personal Income Tax Law in an amount equal to 20% of the monetary contributions made to one or more qualified tuition programs, as defined, by a qualified taxpayer, as defined, during the taxable year, not to exceed $500. This bill would provide that the credit amount in excess of tax liability is refundable in those years in which an appropriation for that purpose is made by the Legislature.
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 each taxable year beginning on or after
4January 1, 2016, and before January 1, 2021, there shall be allowed
5to a qualified taxpayer a credit against the “net tax,” as defined in
6Section 17039, in an amount as determined by paragraph (2).
7(2) The credit amount allowed pursuant to this section shall be
8the lesser of the following:
9(A) Twenty percent of the monetary contributions made by a
10qualified taxpayer to one or more qualified tuition programs during
11the taxable year.
12(B) Five hundred dollars ($500).
13(b) For the purposes of this section:
14(1) “Nonqualified withdrawal” meansbegin delete anyend deletebegin insert aend insert payment or
15distribution from a qualified tuition program that is subject to
16additional tax pursuant to Section 529(c)(6) of the Internal Revenue
17Code, relating to additional tax.
18(2) “Qualified taxpayer” means an individual who, on behalf
19of a beneficiary, contributes money to a qualified tuition program
20for which the individual is the account owner and has one of the
21following annual adjusted gross incomes:
22(A) In the case of a single individual or married individual filing
23a separate return, one hundred thousand dollars ($100,000) or less.
24(B) In the case of a head of household or surviving spouse, as
25defined in Section 17046, or a married couple filing a joint return,
26two hundred thousand dollars ($200,000) or less.
27(3) “Qualified tuition program” means a qualified tuition
28program, as defined in Section 529 of the Internal Revenue Code.
29(c) When a qualified taxpayer receives a nonqualified
30withdrawal, in addition to any tax imposed under this part, an
31additional tax shall be imposed in an amount that is the lesser of
3210 percent of that nonqualified withdrawal or the total amount of
33credit allowed under
subdivision (a) for the taxable year and all
34
prior taxable years in which the qualified taxpayer was allowed a
35credit pursuant to this section.
P3 1(d) That portion of any credit allowed under this section that is
2in excess of tax liability shall be credited against other amounts
3due, if any, and the balance, if any, upon an appropriation by the
4Legislature, be refunded to the qualified taxpayer.
5(e) (1) The Franchise Tax Board may prescribe rules, guidelines,
6or procedures necessary or appropriate to carry out the purposes
7of this section.
8(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
9Division 3 of Title 2 of the Government Code does not apply to
10any standard, criterion, procedure, determination, rule, notice, or
11guideline
established or issued by the Franchise Tax Board
12pursuant to this section.
13(f) This section shall remain in effect only until December 1,
142021, and as of that date is repealed.
This act provides for a tax levy within the meaning of
16Article IV of the Constitution and shall go into immediate effect.
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