BILL NUMBER: AB 2676 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 16, 2016
INTRODUCED BY Assembly Member Chávez
FEBRUARY 19, 2016
An act to amend Section 17052.6 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2676, as amended, Chávez. Income taxes: credit: dependent care.
The Personal Income Tax Law, in modified conformity to federal
income tax law, authorizes a credit for household and dependent care
expenses necessary for gainful employment, as provided. That law
provides that the amount of the state credit is a percentage of the
allowable federal credit determined on the basis of the amount of
federal adjusted gross income earned, as provided.
This bill, for taxable years beginning on or after January 1,
2016, and before January 1, 2019, would increase the
amount of the applicable state credit percentage and revise
adjusted gross income amounts, as provided. for
taxpayers with adjusted gross income amounts of $70,000 or less, 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 1. Section 17052.6 of the Revenue and Taxation Code is
amended to read:
17052.6. (a) For each taxable year beginning on or after January
1, 2000, there shall be allowed as a credit against the "net
tax", tax, " as defined in Section
17039, an amount determined in accordance with Section 21 of the
Internal Revenue Code, relating to expenses for household and
dependent care services necessary for gainful employment, except that
the amount of the credit shall be a percentage, as provided in
subdivision (b) of the allowable federal credit without taking into
account whether there is a federal tax liability.
(b) For the purposes of subdivision (a), the percentage of the
allowable federal credit shall be determined as follows:
(1) For taxable years beginning before January 1, 2003:
The percentage
If the adjusted gross income of
is: credit is:
$40,000 or less........ 63%
Over $40,000 but not over 53%
$70,000......................
Over $70,000 but not over 42%
$100,000.....................
Over $100,000................ 0%
(2) For taxable years beginning on or after January 1, 2003, and
before January 1, 2016:
The percentage
If the adjusted gross income of
is: credit is:
$40,000 or less.............. 50%
Over $40,000 but not over 43%
$70,000......................
Over $70,000 but not over 34%
$100,000.....................
Over $100,000................ 0%
(3) For taxable years beginning on or after January 1,
2016: 2016, and before January 1, 2019:
The percentage
If the adjusted gross income of
is: credit is:
The percentage
If the adjusted gross income of
is: credit is:
The percentage
If the adjusted gross income of
is: credit is:
$100,000 or less............. 200%
Over $100,000 but not over 100%
$125,000.....................
Over $125,000 but not over 50%
$150,000.....................
Over $150,000................ 0%
The percentage
If the adjusted gross income of
is: credit is:
$40,000 or less.............. 65%
Over $40,000 but not over 50%
$70,000......................
Over $70,000 but not over 34%
$100,000.....................
Over $100,000................ 0%
(4) For taxable years beginning on or after January 1, 2019:
The percentage
If the adjusted gross income of
is: credit is:
$40,000 or less.............. 50%
Over $40,000 but not over 43%
$70,000......................
Over $70,000 but not over 34%
$100,000.....................
Over $100,000................ 0%
(c) For purposes of this section, "adjusted gross income" means
adjusted gross income as computed for purposes of paragraph (2) of
subdivision (h) of Section 17024.5.
(d) The credit authorized by this section shall be limited, as
follows:
(1) Employment-related expenses, within the meaning of Section 21
of the Internal Revenue Code, relating to expenses for household and
dependent care services necessary for gainful employment, shall be
limited to expenses for household services and care provided in this
state.
(2) Earned income, within the meaning of Section 21(d) of the
Internal Revenue Code, relating to earned income limitation, shall be
limited to earned income subject to tax under this part. For
purposes of this paragraph, compensation received by a member of the
armed forces Armed Forces for active
services as a member of the armed forces,
Armed Forces, other than pensions or retired pay, shall be
considered earned income subject to tax under this part, whether or
not the member is domiciled in this state.
(e) For purposes of this section, Section 21(b)(1) of the Internal
Revenue Code, relating to a qualifying individual, is modified to
additionally provide that a child, as defined in Section 152
(c)(3) 152(f)(1) of the Internal Revenue Code,
relating to age requirements, child defined,
shall be treated, for purposes of Section 152 of the Internal
Revenue Code, relating to dependent defined, as applicable for
purposes of this section, as receiving over one-half of his or her
support during the calendar year from the parent having custody for a
greater portion of the calendar year, that parent shall be treated
as a "custodial parent," within the meaning of Section 152(e) of the
Internal Revenue Code, relating to special rule for divorced parents,
etc., as applicable for purposes of this section, and the child
shall be treated as a qualifying individual under Section 21(b)(1) of
the Internal Revenue Code, relating to qualifying individual, as
applicable for purposes of this section, if both of the following
apply:
(1) The child receives over one-half of his or her support during
the calendar year from his or her parents who never married each
other and who lived apart at all times during the last six months of
the calendar year.
(2) The child is in the custody of one or both of his or her
parents for more than one-half of the calendar year.
(f) The amendments to this section made by Section 1.5 of Chapter
824 of the Statutes of 2002 shall apply only to taxable years
beginning on or after January 1, 2002.
(g) The amendments made to this section by Chapter 14 of the
Statutes of 2011 shall apply to taxable years beginning on or after
January 1, 2011.
SEC. 2. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.