Budget & Taxes (Income Tax)

The Corporation Tax Law, in conformity with federal income tax law, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. Existing federal income tax law authorizes a qualifying vessel operator, as defined, to elect to determine its corporate tax burden for specified international shipping activities using a per-ton rate and provides an exclusion from gross income for qualifying shipping activities of an electing corporation or a member of an electing group, as specified. This bill, for taxable years beginning on or after January 1, 2026, would provide an exclusion from gross income for qualifying shipping activities of an electing corporation or a member of an electing group for which an election is in effect under the above-described federal law, as specified. The bill would also provide special rules relating to depreciation and basis of a qualifying vessel, as defined, and would, in conformity with federal income tax laws, provide for the nonrecognition of gain from the disposition of a qualifying vessel where the electing corporation acquires a replacement qualifying vessel, as provided. This bill would take effect immediately as a tax levy.

The Personal Income Tax Law allows various credits against the taxes imposed by that law. This bill would allow a credit against those taxes to a licensed nurse employed at a rural health facility, as specified, for each taxable year beginning on or after January 1, 2027, and before January 1, 2032, in an amount equal to $2,000 per taxpayer per taxable year. The bill would require the Department of Health Care Access and Information to provide an annual list to the Franchise Tax Board of rural health facilities, as specified. Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements. This bill would include findings and reporting requirements in compliance with this requirement. This bill would take effect immediately as a tax levy.

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. This bill would allow, for each taxable year beginning on or after January 1, 2027, and before January 1, 2032, a cost-of-living credit against those taxes to a qualified taxpayer, as defined, in a qualified amount, calculated as provided based on the taxpayer's filing and residence status. The 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 to be paid from the Tax Relief and Refund Account and refunded to the taxpayer. By increasing the payments from the Tax Relief and Refund Account, a continuously appropriated fund, the bill would make an appropriation. The Personal Income Tax Law generally defines "gross income" as income from whatever source derived and provides various exclusions from gross income. This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, provide an exclusion from gross income those amounts received as a refund under the above-described cost-of-living tax credit. This bill would make legislative findings and declarations related to a gift of public funds and other related findings and declarations.

The Personal Income Tax Law, in conformity with federal income tax law, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. This bill, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, would exclude from gross income gain received by a qualified taxpayer as a result of the sale or exchange of qualified real property, as defined. The bill would define "qualified taxpayer" to mean an individual who is 55 years of age or older on the date of the sale. The bill would define "qualified real property" to mean real property satisfying certain conditions, including the requirement that the property was used by the qualified taxpayer as their primary residence, as specified, and that the property is sold to a natural person. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.

The Personal Income Tax Law, in modified conformity with federal income tax law, allows various deductions from gross income in calculating adjusted gross income. This bill, for taxable years beginning on or after January 1, 2026, would allow a deduction from gross income for any qualified fitness benefit provided by an employer to an employee, as specified. The bill would define "qualified fitness benefit" as a uniform stipend amount to all full-time employees for fees or dues for membership in a fitness center, health club, or gym, except as specified. Existing law requires specified employers to contribute to the Unemployment Fund based on wages paid for employment. Existing law defines "wages" for this purpose, as provided, and excludes from that definition, among other things, remuneration in excess of $7,000 paid to an individual by an employer during any calendar year, with respect to employment. This bill would additionally exclude from that definition of wages any qualified fitness benefit provided by an employer to an employee, up to $600 per year, as specified. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals 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.

The Personal Income Tax Law and Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2029, would allow a credit for expenses paid or incurred by a qualified taxpayer for an employee obtaining a food handler card, as specified. 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 also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.

The Personal Income Tax Law allows various credits against the taxes imposed by those laws. This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2028, and before January 1, 2033, in an amount equal to 40% of the amount paid or incurred, not to exceed $25,000, during the taxable year for repairs that are required as a condition of closing the sale of real property to a purchaser utilizing a first-time homebuyer assistance program, as specified. The bill would prohibit a taxpayer from claiming more than one credit for a taxable year or more than one taxpayer from claiming the credit with respect to a property for a taxable year. Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements. This bill would include findings and reporting requirements in compliance with this requirement. This bill would take effect immediately as a tax levy.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, allow a credit against those taxes equal to 50% of the cost of a backup electricity generator or solar battery, as specified, by a qualified taxpayer, as defined, for use in a residence or commercial property. The bill would limit the credit to $5,000 per residence or commercial property in the case of the purchase of a backup electricity generator, and to $7,500 in the case of a solar battery. The bill would only apply these provisions in taxable years for which an appropriation is made in the Budget Act or another statute for the purposes of administering the credits. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals 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.

The Personal Income Tax Law, in conformity with federal income tax laws, defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income, including, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, an exclusion from gross income for retirement pay received by a qualified taxpayer, as defined, during the taxable year, not to exceed $20,000, from the federal government for service performed in the uniformed services, as defined, and an exclusion for income annuity payments received by a qualified taxpayer, as defined, not to exceed $20,000, pursuant to a United States Department of Defense Survivor Benefit Plan, as specified. Existing law defines "qualified taxpayer" for the purpose of these exclusions to mean taxpayers that satisfy specified income limitations. This bill would amend the above-described exclusions to annually adjust the income limitations for taxpayers for inflation, as provided, and to increase the limitation on income eligible for exclusion to $40,000. The bill would also extend the exclusions until taxable years beginning before January 1, 2037. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.

The Personal Income Tax Law allows various credits against the tax imposed by that law. Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements. This bill would allow credits against the tax imposed by the Personal Income Tax Law for taxable years beginning on or after January 1, 2027, and before January 1, 2032, to a qualified taxpayer for qualified costs relating to qualified home hardening, as defined, and for qualified costs relating to qualified vegetation management, as defined, in specified amounts, not to exceed an aggregate amount of $50,000,000 per taxable year. This bill would require a qualified taxpayer to reserve a credit for qualified costs relating to qualified home hardening or qualified vegetation management to be eligible for the above-described credits and provide all necessary information for this purpose, as specified. This bill also would include additional information required for any bill authorizing a new income tax credit and would require the Legislative Analyst's Office to prepare a written report regarding the credits, as provided. This bill would take effect immediately as a tax levy.