Senate Bill No. 472

Introduced by Senator Cannella

February 26, 2015

An act to amend Section 17052.6 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 472, as introduced, Cannella. Income tax credit: child and dependent care expenses.

The Personal Income Tax Law allows various credits against the taxes imposed by that law, including a credit, in modified conformity to a credit allowed by federal income tax laws, in an amount equal to specified percentages of allowable federal credit for employment-related child and dependent care expenses.

This bill would make technical, nonsubtsantive changes to these provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. 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”, as defined in Section 17039, an amount determined in
accordance with Section 21 of the Internal Revenue Code, begin insert relating
to expenses for household and dependent care services necessary
for gainful employment, end insert 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:

 

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%

 

(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%

 

(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 begin delete limited, end delete begin insert limited end insert
as follows:

(1) Employment-related expenses, within the meaning of Section
21 of the Internal Revenue Code, 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, shall be limited to earned income subject
to tax under this part. For purposes of this paragraph, compensation
received by a member of the begin delete armed forces end delete begin insert Armed Forces end insert for active
services as a member of the begin delete armed forces, end delete begin insert Armed Forces, end insert 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 151(c)(3)
of the Internal Revenue Code, shall be treated, for purposes of
Section 152 of the Internal Revenue Code, 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, 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, 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 begin delete the act adding this
subdivision end delete begin insert Chapter 14 of the Statutes of 2011 end insert shall apply to
taxable years beginning on or after January 1, 2011.