Personal Income Tax Law: refundable credit: student loan debt.

The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including any amount to be paid as a refundable tax credit in excess of any tax liabilities. This bill would, for the taxable year beginning on or after January 1, 2022, and before January 1, 2023, allow a credit against those taxes for a qualified taxpayer in a specified amount. The bill would define "qualified taxpayer" for this purpose to mean a taxpayer with a degree from a university headquartered in the state who has worked in public service, as defined, for at least 5 years, and who has at least $5,000 in federal student loan debt, as defined. The bill would provide the amount of the credit would be equal to the lesser of the federal student loan debt of the qualified taxpayer or $10,000. This bill would require the amount of the credit exceeding the taxpayer's liability to be credited against other amounts due, if any, and would require the balance, upon appropriation by the Legislature, to be paid from the Tax Relief and Refund Account and refunded to the taxpayer. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would require the Franchise Tax Board to submit, on or before January 10, 2024, a report to the Legislature on the number of qualified taxpayers allowed the credit and the total dollar value of credits allowed. The bill would provide findings and declarations relating to the goals, purposes, and objectives of the tax credit. This bill would take effect immediately as a tax levy.