AB 1371, as introduced, Lackey. Personal income taxes: deduction: education expenses.
The Personal Income Tax Law allows various deductions in computing income that is subject to tax under that law.
This bill, for taxable years on or after January 1, 2016, and before January 1, 2021, would allow a deduction from gross income, not to exceed $2,500, for the cost of education-related expenses of the taxpayer’s dependent child or children attending public or private school, as specified.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: no. 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:
P2 1(a) While ensuring the quality education of all of California’s
2school children is a shared responsibility of the general public, it
3is foremost the duty of individual parents and teachers.
4(b) Providing tax relief for citizens who shoulder an extra weight
5in pursuit of the common good has long been considered sound
6public policy.
7(c) Every school year, kindergarten and grades 1 to 12, inclusive,
8parents across California pay at their own expense to obtain vital
9educational resources and services that are essential to those
10children entrusted to their
parents’ care.
11(d) State education tax relief can help empower and engage low-
12and middle-income families in personally caring for their own
13school children’s learning needs, which they know most intimately.
Section 17052.5 is added to the Revenue and Taxation
15Code, to read:
(a) For each taxable year beginning on or after
17January 1, 2016, and before January 1, 2021, there shall be allowed
18as a deduction an amount equal to the qualified amount that was
19paid or incurred for qualified education-related expenses for one
20or more dependent children by a qualified taxpayer during the
21taxable 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) “Qualified amount” means the amount paid or incurred for
30qualified education-related expenses, not to exceed the amount
31specified in subdivision (c).
32(3) (A) “Qualified education-related expenses” means the
33kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
34and school supplies, including, but not limited to, pens, paper,
35pencils, notebooks, calculators, and rulers; the rental or purchase
36of educational equipment required for classes during the regular
37schoolday; school uniforms that are not part of a cocurricular
38activity; computers, computer hardware, and educational computer
39software used to learn academic subjects; fees for college courses
40at public institutions or independent nonprofit colleges, or for
P3 1summer school courses that satisfy high school graduation
2requirements; psychoeducational diagnostic
evaluations to assess
3the cognitive and academic abilities of pupils; special education
4and related services for pupils who have an individualized
5education program or its equivalent; out-of-school enrichment
6programs, tutoring, and summer programs that are academic in
7nature; and public transportation or third-party transportation
8expenses for traveling directly to and from school.
9(B) “Qualified education-related expenses” shall not include
10any expenses for the items described in subparagraph (A) that also
11are used in a trade or business.
12(4) “Qualified taxpayer” means a parent or legal guardian of a
13full-time pupil who is under 21 years of age at the close of the
14school year who meets both of the following requirements:
15(A) Both the pupil and the parent or guardian reside in California
16when the qualified
education-related expenses are paid or incurred.
17(B) (i) The household income does not exceed 250 percent of
18the federal Income Eligibility Guidelines published by the Food
19and Nutrition Service of the United States Department of
20Agriculture for use in determining eligibility for reduced price
21meals.
22(ii) Household income means gross income as defined in Section
2361 of the Internal Revenue Code.
24(c) The total deduction allowed under this section to a qualified
25taxpayer shall not exceed two thousand five hundred dollars
26($2,500) in a taxable year. If more than one qualified taxpayer may
27be allowed this deduction for a dependent child, the sum of all
28deductions allowed under this section for that dependent child
29shall not exceed two thousand five hundred dollars ($2,500) in a
30taxable year.
31(d) (1) The Franchise Tax Board may prescribe rules,
32guidelines, or procedures necessary or appropriate to carry out the
33purposes of this section.
34(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
35Division 3 of Title 2 of the Government Code shall not apply to
36any standard, criterion, procedure, determination, rule, notice, or
37guideline established or issued by the Franchise Tax Board
38pursuant to this section.
39(e) This section shall remain in effect only until December 1,
402021, and as of that date is repealed.
Section 17072 of the Revenue and Taxation Code is
2amended to read:
(a) Section 62 of the Internal Revenue Code, relating
4to adjusted gross income defined, shall apply, except as otherwise
5provided.
6(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating
7to certain expenses of elementary and secondary school teachers,
8shall not apply.
9(c) Section 62(a)(21) of the Internal Revenue Code, relating to
10attorneys fees relating to awards to whistleblowers, shall not apply.
11(d) Section 62(a) of the Internal Revenue Code is modified to
12provide that the deduction under Section 17052.5 shall be allowed
13in determining adjusted
gross income.
It is the intent of the Legislature to make the findings
15required by Section 41 of the Revenue and Taxation Code.
This act provides for a tax levy within the meaning of
17Article IV of the Constitution and shall go into immediate effect.
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