Amended in Assembly March 20, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2606

Introduced by Assembly Member Dababneh

February 21, 2014

begin delete An act to amend Section 103 of the Revenue and Taxation Code, relating to taxation. end delete begin insert An act to add and repeal Section 17053.81 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2606, as amended, Dababneh. begin delete Property taxation: property: definition. end delete begin insert Income taxes: credit: long-term care. end insert

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The Personal Income Tax Law allows various credits against the taxes imposed by that law.

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This bill would, for each taxable year beginning on or after January 1, 2015, and before January 1, 2020, allow a credit to a taxpayer in an amount equal to $500 multiplied by the number of applicable individuals, as defined, with respect to whom the taxpayer is an eligible caregiver during that taxable year.

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This bill would take effect immediately as a tax levy.

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Existing property tax law defines property to include all matters and things, real, personal, and mixed, that are capable of private ownership.

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This bill would make technical, nonsubstantive changes to this provision.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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begin insert Section 17053.81 is added to the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

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begin insert 17053.81. end insert   

(a) For each taxable year beginning on or after
January 1, 2015, and before January 1, 2020, there shall be
allowed to a taxpayer as a credit against the “net tax,” as defined
in Section 17039, an amount equal to five hundred dollars ($500)
multiplied by the number of applicable individuals for whom the
taxpayer is an eligible caregiver during the taxable year.

(b) For purposes of this section:

(1) (A) “Applicable individual” means an individual who has
been certified before the due date for filing the return of tax,
without extensions, for the taxable year by a physician as being
an individual with long-term care needs for a period of time that
is at least 180 consecutive days and a portion of that time occurs
within the taxable year.

(B) “Applicable individual” shall not include an individual
otherwise meeting the requirements of subparagraph (A) unless
within the preceding 391⁄2 month period ending on the due date in
subparagraph (A) a physician has certified that the individual
meets those requirements.

(2) “An individual with long-term care needs” means an
individual who meets any of the following:

(A) The individual is at least six years of age and meets either
of the following:

(i) The individual is unable to perform at least three activities
of daily living, as defined in Section 7702B(c)(2)(B) of the Internal
Revenue Code, without substantial assistance from another
individual due to a loss of functional capacity.

(ii) The individual requires substantial supervision to protect
that individual from threats to health and safety due to severe
cognitive impairment and is unable to perform at least one activity
of daily living, as defined in Section 7702B(c)(2)(B) of the Internal
Revenue Code, or the individual is unable to engage in age
appropriate activities, to the extent provided by the Franchise Tax
Board in consultation with the Secretary of the California Health
and Human Services Agency.

(B) The individual is at least two years of age but less than six
years of age and is unable to perform without substantial assistance
from another individual due to a loss of functional capacity at
least two of the following activities: eating, transferring, or
mobility.

(C) The individual is under two years of age and requires
specific durable medical equipment by reason of a severe health
condition or requires a skilled health care practitioner trained to
address the individual’s condition to be available if the individual’s
parents or guardians are absent.

(3) “Physician” has the same meaning as that term is defined
in Section 1935x(r)(1) of the Internal Revenue Code.

(c) (1) A taxpayer shall be treated as an “eligible caregiver”
for each taxable year for any the following applicable individuals:

(A) The taxpayer.

(B) The taxpayer’s spouse.

(C) An individual for whom the taxpayer is allowed a credit
under subdivision (d) of Section 17054 for the taxable year.

(2) The requirements of this subdivision are met if an applicable
individual has as his or her principal place of abode the home of
the taxpayer and either of the following:

(A) In the case of an applicable individual who is an ancestor
or descendant of the taxpayer or the taxpayer’s spouse, the
applicable individual is a member of the taxpayer’s household for
over half the taxable year.

(B) In the case of any other applicable individual, the applicable
individual is a member of the taxpayer’s household for the entire
taxable year.

(3) (A) Only one taxpayer shall be treated as an eligible
caregiver for an applicable individual. If more than one taxpayer
qualifies as an eligible caregiver for an applicable individual for
taxable years ending with or within the same calendar year, the
taxpayer who will not claim the applicable individual shall file a
written declaration, in the form and manner as the Franchise Tax
Board may prescribe, stating that he or she will not claim the
applicable individual for the credit allowed under this section.

(B) If no declaration is filed under subparagraph (A), the
taxpayer with the highest federal modified adjusted gross income,
as defined in Section 32(c)(2) of the Internal Revenue Code, shall
be treated as the eligible caregiver.

(C) In the case of married individuals filing separate returns,
the determination as to which taxpayer is the eligible caregiver
shall be made pursuant to subparagraph (B), regardless of whether
or not one of them has filed a written declaration pursuant to
subparagraph (A).

(d) (1) A credit shall not be allowed under this section unless
the taxpayer includes the name and taxpayer identification number
of the eligible individual and the identification number or national
provider identifier of the physician certifying the applicable
individual on the return of tax for the taxable year.

(2) The denial of any credit under paragraph (1) may be made
pursuant to Section 19051.

(e) The taxpayer shall retain the physician certification required
pursuant to paragraph (1) of subdivision (b) for three years and
shall make that certification available to the Franchise Tax Board
upon request during that period.

(f) A credit shall not be allowed under this section for any
eligible caregiver whose adjusted gross income for the taxable
year is equal to or greater than one hundred thousand dollars
($100,000) in the case of a married couple filing a joint return,
and fifty thousand dollars ($50,000) in the case of all other
individuals.

(g) This section shall remain in effect only until December 1,
2020, and as of that date is repealed.

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begin insert SEC. 2. end insert   

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

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SECTION 1.  

Section 103 of the Revenue and Taxation Code
is amended to read:

103.  

“Property” includes all those matters and things, real,
personal, and mixed, that are capable of private ownership.

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