AB 1634

Bill Subjects

Income Taxes Childcare Deduction

Abstract

The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal income tax laws, generally allow various deductions in computing the income that is subject to tax imposed under those laws. This bill, for taxable years beginning on or after January 1, 2024, and before January 1, 2029, would allow a deduction in computing income for any cost paid or incurred by a taxpayer for qualified childcare provided by the taxpayer to a dependent, under 6 years of age, of the taxpayer's employee, not to exceed $5,000 per taxable year per qualified dependent. The bill would define qualified childcare for these purposes as a licensed childcare facility or program that is owned or operated by the taxpayer and is intended to be used primarily by dependents of employees of the taxpayer. 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. This bill would take effect immediately as a tax levy.