SB 1148, as introduced, Stone. Personal income taxes: deductions: education expenses.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law, including deductions for payments to individual retirement accounts, alimony payments, and interest on educational loans.
This bill, for taxable years beginning on or after January 1, 2016, would allow a deduction in computing adjusted gross income for those amounts paid or incurred by a qualified taxpayer, as defined, during the taxable year for qualified education expenses, 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 17072 of the Revenue and Taxation Code
2 is amended to read:
(a) Section 62 of the Internal Revenue Code, relating
4to adjusted gross income defined, shall apply, except as otherwise
5provided.
P2 1(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating
2to certain expenses of elementary and secondary school teachers,
3shall not apply.
4(c) Section 62(a)(21) of the Internal Revenue Code, relating to
5attorneys fees relating to awards to whistleblowers, shall not apply.
6(d) Section 62(a) of the Internal Revenue Code is modified to
7provide that the deduction under Section 17206.2 shall be allowed
8in determining adjusted
gross income.
Section 17206.2 is added to the Revenue and Taxation
10Code, to read:
(a) For taxable years beginning on or after January
121, 2016, there shall be allowed as a deduction the amount paid or
13incurred by a qualified taxpayer during the taxable year for
14qualified education expenses at a public four-year university or
15community college.
16(b) For the purposes of this section, both of the following apply:
17(1) “Qualified education expenses” means both of the following:
18(A) Costs of attendance that include, but are not limited to,
19payments for books, supplies, equipment, tuition, and fees, and
20similar payments.
21(B) Payments of principal of a qualified education loan, as
22defined in Section 221 of the Internal Revenue Code, relating to
23interest on education loans.
24(2) “Qualified taxpayer” means an individual who pays or incurs
25qualified education expenses during the taxable year for any natural
26person including, but not limited to, the taxpayer, the taxpayer’s
27spouse, or any dependent of the taxpayer and who has a federal
28adjusted gross income of two hundred fifty thousand dollars
29($250,000) or less during the taxable year in which those expenses
30are paid or incurred.
31(c) For each taxable year beginning on or after January 1, 2017,
32the Franchise Tax Board shall recompute the federal adjusted gross
33income limitation described in paragraph (2) of subdivision (b).
34That computation shall be made in the same manner as described
35in
subdivision (h) of Section 17041.
This act provides for a tax levy within the meaning of
37Article IV of the Constitution and shall go into immediate effect.
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