AB 158

Bill Subjects

Abstract

(1) The Personal Income Tax Law allows various credits against the taxes imposed by that law. This bill would, for taxable years beginning on or after January 1, 2024, allow a credit in an amount equal to the greater of the dues paid to a labor organization during the taxable year by an individual multiplied by a workers' tax credit adjustment factor, as described, or an amount of dues paid by an individual not to exceed a specified amount, as provided in the annual Budget Act. The bill would state the intent of the Legislature that the values provided in the annual Budget Act be calculated to limit the annual revenue loss resulting from the credit to no more than $400,000,000. The bill would provide that the credit amount in excess of the taxpayer's liability would be paid to the taxpayer from the Tax Relief and Refund Account upon appropriation by the Legislature. The bill would provide that this credit would be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed with respect to amounts taken into account in calculating the credit. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. (2) The Personal Income Tax Law and the Corporation Tax Law allow a small business hiring credit to a qualified small business employer, as defined, calculated based on net increase in qualified employees, as defined, over a specified period of time. This bill would make nonsubstantive clarifying changes to those provisions. (3) The Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally define "gross income" as income from whatever source derived, except as specifically excluded, and provide various exclusions from gross income. Existing law, in conformity with the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) , and its subsequent amendments in the Paycheck Protection Program and Health Care Enhancement Act, the Paycheck Protection Program Flexibility Act of 2020, and the Consolidated Appropriations Act, 2021, among other things, excludes any amounts of covered loans forgiven under the CARES Act from gross income for purposes of the Personal Income Tax Law and the Corporation Tax Law for taxable years beginning on or after January 1, 2019. Existing law, effective June 30, 2022, excludes from gross income any covered loan amounts forgiven pursuant to the federal PPP Extension Act of 2021. Existing law makes changes to the computation of tax effective for taxable years beginning on or after January 1 of the year in which the act takes effect, except as provided. This bill would provide that the provisions of law that exclude from gross income any covered loan amounts forgiven pursuant to the PPP Extension Act of 2021 are effective for taxable years beginning on or after January 1, 2019. (4) The Personal Income Tax Law, in modified conformity with federal income tax laws, allows a California Earned Income Tax Credit (CalEITC) against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor. Existing law provides that any unwarranted disclosure or use of taxpayer information, as specified, is a misdemeanor. Existing law establishes the State Department of Social Services and requires the department to administer various public social services programs, such as the CalFood Program and the In-Home Supportive Services Program. Existing law also establishes the State Department of Health Care Services within the California Health and Human Services Agency, and sets forth the department's powers and duties relating to, among other things, public health, licensing and certification of certain health facilities, and the state Medi-Cal program. Existing law requires the State Department of Social Services to exchange data with the Franchise Tax Board upon request, including the names, addresses, and contact information of individuals that may qualify for the CalEITC, and requires the data provided to remain confidential and be used only for purposes directly connected with the CalEITC. Existing law also requires the State Department of Health Care Services to exchange data with the Franchise Tax Board upon request, including sufficient identifying information to allow the department and the board to assess the extent to which the department and the board can identify individuals enrolled in Medi-Cal who may be eligible for the CalEITC and the federal Earned Income Tax Credit. That law requires the data provided to remain confidential and be used only for purposes directly connected with the CalEITC and the federal Earned Income Tax Credit, as specified. Existing law authorizes the Franchise Tax Board to disclose individual income tax return information for taxable years beginning on or after January 1, 2018, and before January 1, 2020, to the State Department of Social Services, and requires the data provided to remain confidential and be used only for purposes of informing state residents of the availability of federal economic stimulus payments. This bill would repeal the provisions relating to the exchange of data between the State Department of Social Services, State Department of Health Care Services, and the Franchise Tax Board described above. The bill would instead require the State Department of Social Services and the State Department of Health Care Services to exchange data with the Franchise Tax Board, including the names, addresses, and contact information of individuals that may qualify for the CalEITC, and would require all data provided to remain confidential and be used only for purposes directly connected with the federal Earned Income Tax Credit, the CalEITC, and other federal and state antipoverty tax credits. The bill would authorize the Franchise Tax Board to disclose individual income tax return information for taxable years beginning on or after January 1, 2020, and before January 1, 2022, to the State Department of Social Services and the State Department of Health Care Services, and would require the data provided to remain confidential and be used only for purposes of informing state residents of the availability of the Volunteer Income Tax Assistance (VITA) , CalFile, the federal Earned Income Tax Credit, the California Earned Income Tax Credit, and other federal and state antipoverty tax credits that are designed to alleviate poverty and tax burdens of low-income households. The bill would additionally require the State Department of Social Services and the State Department of Health Care Services that receive data from the Franchise Tax Board to annually provide the Franchise Tax Board the results and findings of outreach conducted to measure whether the outreach achieves its intended purpose of increasing the number of claims for the federal Earned Income Tax Credit, the California Earned Income Tax Credit, and other state and federal antipoverty tax credits. The bill would provide that an unauthorized disclosure or use of taxpayer information disclosed under these provisions is a misdemeanor. By expanding the scope of a crime, the bill would impose a state-mandated local program. This bill would make an appropriation of $20,000 from the General Fund to the Franchise Tax Board for the purpose of administering these data sharing provisions. (5) Existing law, the Better for Families Act, requires the Controller to make a one-time Better for Families Tax Refund payment to each qualified recipient, as defined, of an applicable amount, as specified, in the form and manner determined by the Franchise Tax Board. This bill would instead require the Franchise Tax Board to make these payments. (6) This bill would also make findings and declarations related to a gift of public funds. (7) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. (8) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.