Amended in Senate April 20, 2015

Amended in Senate March 23, 2015

Senate BillNo. 268

Introduced bybegin delete Senatorend deletebegin insert Senatorsend insert Nguyenbegin insert and Vidakend insert

begin insert

(Coauthor: Senator Bates)

end insertbegin insert

(Coauthors: Assembly Members Bigelow, Olsen, and Waldron)

end insert

February 19, 2015

begin deleteAn act to amend Section 17052.6 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end deletebegin insertAn act to amend Section 17052.6 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 268, as amended, Nguyen. Income taxes: credit: dependent care.

begin insert

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. The amount of the credit is a percentage of the allowable federal credit determined on the basis of the amount of federal adjusted gross income, up to $100,000.

end insertbegin insert

This bill, for taxable years beginning on or after January 1, 2015, would increase that amount of federal adjusted gross income, up to $250,000, and would increase the amount of employment-related expenses incurred during a taxable year which may be taken into account in determining the amount of the credit from $3,000 to $4,000 if there is one qualifying dependent and from $6,000 to $12,000 if there are 2 or more qualifying dependents.

end insertbegin insert

This bill would take effect immediately as a tax levy.

end insertbegin delete

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.

end deletebegin delete

This bill, for taxable years beginning on or after January 1, 2015, would increase the amount of employment-related expenses incurred during a taxable year which may be taken into account in determining the amount of the credit from $3,000 to $4,000 if there is one qualifying dependent and from $6,000 to $12,000 if there are 2 or more qualifying dependents.

end deletebegin delete

This bill would take effect immediately as a tax levy.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 17052.6 of the end insertbegin insertRevenue and Taxation
2Codeend insertbegin insert is amended to read:end insert

3

17052.6.  

(a) For each taxable year beginning on or after
4January 1, 2000, there shall be allowed as a credit against the “net
5tax”, as defined in Section 17039, an amount determined in
6accordance with Section 21 of the Internal Revenue Code,begin insert relating
7to expenses for household and dependent care services necessary
8for gainful employment,end insert except that the amount of the credit shall
9be a percentage, as provided in subdivision (b) of the allowable
10federal credit without taking into account whether there is a federal
11tax liability.

12(b) For the purposes of subdivision (a), the percentage of the
13allowable federal credit shall be determined as follows:

14(1) For taxable years beginning before January 1, 2003:


15

 


If the adjusted gross income is:

The percentage of
credit is:

$40,000 or less   

63%

Over $40,000 but not over $70,000   

53%

Over $70,000 but not over $100,000   

42%

Over $100,000   

 0%
P2   22P2    79P2   16

 

23(2) For taxable years beginning on or after January 1,begin delete 2003:end delete
24begin insert 2003, and before January 1, 2015:end insert

 


If the adjusted gross income is:

The percentage of
credit is:

$40,000 or less   

50%

Over $40,000 but not over $70,000   

43%

Over $70,000 but not over $100,000   

34%

Over $100,000   

 0%
9P2   16

 

begin insert

8(3) For taxable years beginning on or after January 1, 2015:

end insert

 

begin insert
begin insert


If the adjusted gross income is:

end insert		begin insert

The percentage of
credit is:

end insert
begin insert

$100,000 or less   

end insert		begin insert

50%

end insert
begin insert

Over $100,000 but not over $175,000   

end insert		begin insert

43%

end insert
begin insert

Over $175,000 but not over $250,000   

end insert		begin insert

34%

end insert
begin insert

Over $250,000   

end insert		begin insert

 0%

end insert
end insertP2   16

 

17(c) For purposes of this section, “adjusted gross income” means
18adjusted gross income as computed for purposes of paragraph (2)
19of subdivision (h) of Section 17024.5.

20(d) The credit authorized by this section shall be limited, as
21follows:

22(1) Employment-related expenses, within the meaning of Section
2321 of the Internal Revenue Code,begin insert relating to expenses for
24household and dependent care services necessary for gainful
25employment,end insert shall be limited to expenses for household services
26and care provided in this state.

27(2) Earned income, within the meaning of Section 21(d) of the
28Internal Revenue Code,begin insert relating to earned income limitation,end insert shall
29be limited to earned income subject to tax under this part. For
30purposes of this paragraph, compensation received by a member
31of the armed forces for active services as a member of the armed
32forces, other than pensions or retired pay, shall be considered
33earned income subject to tax under this part, whether or not the
34member is domiciled in this state.

35(e) For purposes of this section, Section 21(b)(1) of the Internal
36Revenue Code, relating to a qualifying individual, is modified to
37additionally provide that a child, as defined in Sectionbegin delete 151(c)(3)end delete
38begin insert 152(c)(3)end insert of the Internal Revenue Code,begin insert relating to age
39requirements,end insert shall be treated, for purposes of Section 152 of the
40Internal Revenue Code,begin insert relating to dependent defined,end insert as applicable
P4    1for purposes of this section, as receiving over one-half of his or
2her support during the calendar year from the parent having custody
3for a greater portion of the calendar year, that parent shall be treated
4as a “custodial parent,” within the meaning of Section 152(e) of
5the Internal Revenue Code,begin insert relating to special rule for divorced
6parents, etc.,end insert as applicable for purposes of this section, and the
7child shall be treated as a qualifying individual under Section
821(b)(1) of the Internal Revenue Code,begin insert relating to qualifying
9individual,end insert as applicable for purposes of this section, if both of the
10following apply:

11(1) The child receives over one-half of his or her support during
12the calendar year from his or her parents who never married each
13other and who lived apart at all times during the last six months
14of the calendar year.

15(2) The child is in the custody of one or both of his or her parents
16for more than one-half of the calendar year.

begin insert

17(f) For taxable years beginning on or after January 1, 2015:

end insertbegin insert

18(1) The reference to “$3,000” in Section 21(c)(1) of the Internal
19Revenue Code is modified to read “$4,000.”

end insertbegin insert

20(2) The reference to “$6,000” in Section 21(c)(2) of the Internal
21Revenue Code is modified to read “$12,000.”

end insertbegin delete

22(f)

end delete

23begin insert(g)end insert The amendments to this section made by Section 1.5 of
24Chapter 824 of the Statutes of 2002 shall apply only to taxable
25years beginning on or after January 1, 2002.

begin delete

26(g)

end delete

27begin insert(h)end insert The amendments made to this section bybegin insert Chapter 14 ofend insert the
28begin delete act adding this subdivisionend deletebegin insert Statutes of 2011end insert shall apply to taxable
29years beginning on or after January 1, 2011.

30begin insert

begin insertSEC. 2.end insert  

end insertbegin insert

This act provides for a tax levy within the meaning of
31Article IV of the Constitution and shall go into immediate effect.

end insert
begin delete
32

SECTION 1.  

Section 17052.6 of the Revenue and Taxation
33Code is amended to read:

34

17052.6.  

(a) For each taxable year beginning on or after
35January 1, 2000, there shall be allowed as a credit against the “net
36tax”, as defined in Section 17039, an amount determined in
37accordance with Section 21 of the Internal Revenue Code, relating
38to expenses for household and dependent care services necessary
39for gainful employment, except that the amount of the credit shall
40be a percentage, as provided in subdivision (b) of the allowable
P5    1federal credit without taking into account whether there is a federal
2tax liability.

3(b) For the purposes of subdivision (a), the percentage of the
4allowable federal credit shall be determined as follows:

5(1) For taxable years beginning before January 1, 2003:


6

 


If the adjusted gross income is:

The percentage of
credit is:

$40,000 or less   

63%

Over $40,000 but not over $70,000   

53%

Over $70,000 but not over $100,000   

42%

Over $100,000   

 0%
P5   1315P5   22

 

14(2) For taxable years beginning on or after January 1, 2003:

 


If the adjusted gross income is:

The percentage of
credit is:

$40,000 or less   

50%

Over $40,000 but not over $70,000   

43%

Over $70,000 but not over $100,000   

34%

Over $100,000   

 0%
P5   22

 

23(c) For purposes of this section, “adjusted gross income” means
24adjusted gross income as computed for purposes of paragraph (2)
25of subdivision (h) of Section 17024.5.

26(d) The credit authorized by this section shall be limited, as
27follows:

28(1) Employment-related expenses, within the meaning of Section
2921 of the Internal Revenue Code, relating to expenses for household
30and dependent care services necessary for gainful employment,
31shall be limited to expenses for household services and care
32provided in this state.

33(2) Earned income, within the meaning of Section 21(d) of the
34Internal Revenue Code, relating to earned income limitation, shall
35be limited to earned income subject to tax under this part. For
36purposes of this paragraph, compensation received by a member
37of the armed forces for active services as a member of the armed
38forces, other than pensions or retired pay, shall be considered
39earned income subject to tax under this part, whether or not the
40member is domiciled in this state.

P6    1(e) For purposes of this section, Section 21(b)(1) of the Internal
2Revenue Code, relating to a qualifying individual, is modified to
3additionally provide that a child, as defined in Section 152(f)(1)
4of the Internal Revenue Code, relating to child defined, shall be
5treated, for purposes of Section 152 of the Internal Revenue Code,
6relating to dependent defined, as applicable for purposes of this
7section, as receiving over one-half of his or her support during the
8calendar year from the parent having custody for a greater portion
9of the calendar year, that parent shall be treated as a “custodial
10parent,” within the meaning of Section 152(e) of the Internal
11Revenue Code, relating to special rule for divorced parents, etc.,
12as applicable for purposes of this section, and the child shall be
13treated as a qualifying individual under Section 21(b)(1) of the
14Internal Revenue Code, relating to qualifying individual, as
15applicable for purposes of this section, if both of the following
16apply:

17(1) The child receives over one-half of his or her support during
18the calendar year from his or her parents who never married each
19other and who lived apart at all times during the last six months
20of the calendar year.

21(2) The child is in the custody of one or both of his or her parents
22for more than one-half of the calendar year.

23(f) For taxable years beginning on or after January 1, 2015:

24(1) The reference to “$3,000” in Section 21(c)(1) of the Internal
25Revenue Code is modified to read “$4,000”.

26(2) The reference to “$6,000” in Section 21(c)(2) of the Internal
27Revenue Code is modified to read “$12,000”.

28(g) The amendments to this section made by Section 1.5 of
29Chapter 824 of the Statutes of 2002 shall apply only to taxable
30years beginning on or after January 1, 2002.

31(h) The amendments made to this section by Chapter 14 of the
32Statutes of 2011 shall apply to taxable years beginning on or after
33January 1, 2011.

34

SEC. 2.  

This act provides for a tax levy within the meaning of
35Article IV of the Constitution and shall go into immediate effect.

end delete

O

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