AB 2694, as amended, Lackey. Taxation: renters’ credit.
The Personal Income Tax Law authorizes various credits against the taxes imposed by that law, including a credit for qualified renters in the amount of $120 for married couples filing joint returns, heads of household, and surviving spouses if adjusted gross income is $50,000, as adjusted, or less, and in the amount of $60 for other individuals if adjusted gross income is $25,000, as adjusted, or less. Existing law requires the Franchise Tax Board to annually adjust for inflation these adjusted gross income amounts. For 2016, the adjusted gross income limit is $76,518 and $38,259, respectively.
This bill would, for taxable years beginning on and after January 1, 2016, increase this credit for a qualified renter to $240 for married couples filing joint returns, heads of household, and surviving spouses if adjusted gross income is $100,000 or less, and to an amount equal to $120 for other individuals if adjusted gross income is $50,000 or less. The bill would require the Franchise Tax Board to annually adjust the adjusted gross income amount for inflation, beginning January 1, 2017.
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 17053.5 of the Revenue and Taxation
2Code is amended to read:
(a) (1) For a qualified renter, there shall be allowed
4a credit against his or her “net tax,” as defined in Section 17039.
5The amount of the credit shall be as follows:
6(A) For taxable years beginning before January 1, 2016:
7(i) For married couples filing joint returns, heads of household,
8and surviving spouses, as defined in Section 17046, the credit shall
9be equal to one hundred twenty dollars ($120) if adjusted gross
10income is fifty thousand dollars ($50,000) or less.
11(ii) For other individuals, the credit shall be equal to sixty dollars
12($60) if adjusted gross income is
twenty-five thousand dollars
13($25,000) or less.
14(B) For taxable years beginning on or after January 1, 2016:
15(i) For married couples filing joint returns, heads of household,
16and surviving spouses, as defined in Section 17046, the credit shall
17be equal to two hundred forty dollars ($240) if adjusted gross
18income is one hundred thousand dollars ($100,000) or less.
19(ii) For other individuals, the credit shall be equal to one hundred
20twenty dollars ($120) if adjusted gross income is fifty thousand
21dollars ($50,000) or less.
22(2) Except as provided in subdivision (b), a husband and wife
23shall receivebegin delete butend deletebegin insert
onlyend insert one credit under this section. If the husband
24and wife file separate returns, the credit may be taken by either or
25equally divided between them, except as follows:
26(A) If one spouse was a resident for the entire taxable year and
27the other spouse was a nonresident for part or all of the taxable
28year, the resident spouse shall be allowed one-half the credit
29allowed to married persons and the nonresident spouse shall be
30permitted one-half the credit allowed to married persons, prorated
31as provided in subdivision (e).
32(B) If both spouses were nonresidents for part of the taxable
33year, the credit allowed to married persons shall be divided equally
34between them subject to the proration provided in subdivision (e).
P3 1(b) For a husband and wife, if each spouse maintained a separate
2
place of residence and resided in this state during the entire taxable
3year, each spouse will be allowed one-half the full credit allowed
4to married persons provided in subdivision (a).
5(c) For purposes of this section, a “qualified renter” means an
6individual who satisfies both of the following:
7(1) Was a resident of this state, as defined in Section 17014.
8(2) Rented and occupied premises in this state which constituted
9his or her principal place of residence during at least 50 percent
10of the taxable year.
11(d) “Qualified renter” does not include any of the following:
12(1) An individual who for more than 50 percent of the taxable
13year rented and occupied premises that were exempt from
property
14taxes, except that an individual, otherwise qualified, is deemed a
15qualified renter if he or she or his or her landlord pays possessory
16interest taxes, or the owner of those premises makes payments in
17lieu of property taxes that are substantially equivalent to property
18taxes paid on properties of comparable market value.
19(2) An individual whose principal place of residence for more
20than 50 percent of the taxable year is with any other person who
21claimed that individual as a dependent for income tax purposes.
22(3) An individual who has been granted or whose spouse has
23been granted the homeowners’ property tax exemption during the
24taxable year. This paragraph does not apply to an individual whose
25spouse has been granted the homeowners’ property tax exemption
26if each spouse maintained a separate residence for the entire taxable
27year.
28(e) An otherwise qualified renter who is a nonresident for any
29portion of the taxable year shall claim the credits set forth in
30subdivision (a) at the rate of one-twelfth of those credits for each
31full month that individual resided within this state during the
32taxable year.
33(f) A person claiming the credit provided in this section shall,
34as part of that claim, and under penalty of perjury, furnish that
35information as the Franchise Tax Board prescribes on a form
36supplied by the board.
37(g) The credit provided in this section shall be claimed on returns
38in the form as the Franchise Tax Board may from time to time
39prescribe.
P4 1(h) For purposes of this section, “premises” means a house or
2a dwelling unit used to provide living accommodations in a
3building or
structure and the land incidental thereto, but does not
4include land only, unless the dwelling unit is a mobilehome. The
5credit is not allowed for any taxable year for the rental of land
6upon which a mobilehome is located if the mobilehome has been
7granted a homeowners’ exemption under Section 218 in that year.
8(i) This section shall become operative on January 1, 1998, and
9applies to any taxable year beginning on or after January 1, 1998.
10(j) For each taxable year beginning on or after January 1, 1999,
11and before January 1, 2016, and for each taxable year beginning
12on or after January 1, 2017, the Franchise Tax Board shall
13recompute the adjusted gross income amounts set forth in
14subparagraphs (A) and (B), respectively, of paragraph (1)begin insert ofend insert
15 subdivision (a). The computation
shall be made as follows:
16(1) The Department of Industrial Relations shall transmit
17annually to the Franchise Tax Board the percentage change in the
18California Consumer Price Index for all items from June of the
19prior calendar year to June of the current year, no later than August
201 of the current calendar year.
21(2) The Franchise Tax Board shall compute an inflation
22adjustment factor by adding 100 percent to that portion of the
23percentage change figure furnished pursuant to paragraph (1) and
24dividing the result by 100.
25(3) The Franchise Tax Board shall multiply the amounts in
26paragraph (1) of subdivision (a) for the preceding taxable year by
27the inflation adjustment factor determined in paragraph (2), and
28round off the resulting products to the nearest one dollar ($1).
29(4) In computing the amounts pursuant to this subdivision, the
30amounts provided in subparagraph (A) of paragraph (1) of
31subdivision (a) shall be twice the amount provided in subparagraph
32(B) of paragraph (1) of subdivision (a).
This act provides for a tax levy within the meaning of
34Article IV of the Constitution and shall go into immediate effect.
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