AB 1055, as introduced, Baker. Personal Income Tax Law: exclusion: student loan debt forgiveness: disability and blindness.
The Personal Income Tax Law provides for various exclusions from gross income, including an exclusion for the amount of student loan indebtedness repaid or canceled pursuant to a specified federal law.
This bill would exclude from gross income the amount of student loan debt discharged on or after January 1, 2015, of an eligible individual who was entitled to specified disability benefits or who provides a specified certification of disability with the Franchise Tax Board, as provided.
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 17144.6 is added to the Revenue and
2Taxation Code, to read:
(a) Section 108(f)(1) of the Internal Revenue Code
4is modified to additionally provide that in the case of an individual,
P2 1gross income does not include any amount that, but for this section,
2would be includible in gross income by reason of the discharge,
3in whole or in part, of any student loan if the individual is an
4eligible individual for the taxable year.
5(b) (1) For purposes of this section, an individual is an eligible
6individual for a taxable year if either of the following apply during
7the taxable year:
8(A) The individual is entitled to benefits based on blindness or
9disability under Title II or XVI of the federal Social Security Act
10(42 U.S.C.).
11(B) The individual files a disability certification with the
12Franchise Tax Board.
13(2) For purposes of this section, the term “disability
14certification” means, with respect to an individual, a certification
15to the satisfaction of the Franchise Tax Board by the individual or
16the parent or guardian of the individual that provides both of the
17following:
18(A) That the individual has a medically determinable physical
19or mental impairment that results in marked and severe functional
20limitations that can be expected to result in death, a medically
21determinable physical or mental impairment that has lasted for a
22continuous period of not less than 12 months, or is blind, within
23the meaning of Section 1614(a)(2) of the federal Social Security
24Act (42 U.S.C. Sec. 1382c(a)(2)).
25(B) A copy of the individual’s diagnosis relating to the
26individual’s relevant impairment signed by a physician meeting
27the criteria of Section 1861(r)(1) of the federal Social Security Act
28(42 U.S.C. Sec. 1395x(r)(1)).
29(c) This section shall apply to discharges of indebtedness
30occurring on or after January 1, 2015.
This act provides for a tax levy within the meaning of
32Article IV of the Constitution and shall go into immediate effect.
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