Amended in Assembly May 15, 2014

Amended in Assembly March 20, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2606

Introduced by Assembly Member Dababneh

February 21, 2014

An act to add and repeal Section 17053.81 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2606, as amended, Dababneh. Income taxes: credit: long-term care.

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

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.

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 1.  

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

17053.81.  

(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 begin delete 1935x(r)(1) end delete begin insert 213(d)(4) end insert of the Internal Revenue Code.

(c) (1) A taxpayer shall be treated as an “eligible caregiver”
for each taxable year for any begin insert of end insert 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 begin delete following: end delete begin insert following applies: end insert

(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
begin delete over half end delete begin insert more than one-half end insert 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 begin delete federal modified adjusted gross income,
as defined in Section 32(c)(2) of the Internal Revenue Code, end delete
begin insert adjusted gross income end insert 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 begin delete eligible end delete begin insert applicable end insert 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 begin delete three years end delete begin insert four
years from the date the return claiming the credit was filed end insert 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.

SEC. 2.  

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