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AB-1597 Personal income tax: credit: loss of income.(2011-2012)

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Amended  IN  Assembly  March 20, 2012

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 1597

Introduced  by  Assembly Member Cook
 (Coauthor(s): Assembly Member Jeffries, Silva)
 (Coauthor(s): Senator Dutton, Harman)

February 06, 2012

An act to add Section 17054.6 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1597, as amended, Cook. Personal income tax: credit: loss of income.
The Personal Income Tax Law authorizes allows various credits against the taxes imposed by that law.
This bill would authorize a refundable allow a credit against those taxes for each taxable year beginning on or after January 1, 2012, in an amount equal to 10% of the loss of income, as defined, not to exceed $300 if single and $600 if married, subject to certain limitations. The bill, upon appropriation by the Legislature, would require the refunds to be paid from the Tax Relief and Refund Account. This bill would allow the credit only if the loss of income is not the result of a dismissal or termination for cause or the result of a finding of guilt in a criminal proceeding or a pending criminal investigation.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17054.6 is added to the Revenue and Taxation Code, to read:

17054.6.
 (a)  For each taxable year beginning on or after January 1, 2012, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 10 percent of the loss of income of a taxpayer.
(b) The credit under this section shall not exceed three hundred dollars ($300) per taxable year for a single individual or a married individual filing a separate return, and six hundred dollars ($600) per taxable year for a married couple filing a joint return.
(c) For purposes of this section, “loss of income” means a reduction in adjusted gross income in the current taxable year from the preceding taxable year of 10 percent or more.
(d) The credit under this section shall be allowed only if adjusted gross income for the taxable year is less than:
(1) Eighty thousand dollars ($80,000), if single.
(2) One hundred sixty thousand dollars ($160,000), if married.

(e)If the amount allowable as a credit under this section exceeds the tax liability computed under this part, the excess shall be credited against other amounts due, if any, and the balance, if any, shall, upon appropriation by the Legislature, be paid from the Tax Relief and Refund Account and refunded to the taxpayer.

(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding nine years if necessary, until the credit is exhausted.
(f) (1) A credit under this section shall be allowed only if the loss of income is not the result of a dismissal or termination for cause or the result of a finding of guilt in a criminal proceeding or a pending criminal investigation.
(2) By signing a tax return in which this credit is claimed, the taxpayer shall affirmatively acknowledge the loss of income is not the result of a dismissal or termination for cause or a result of a finding of guilt in a criminal proceeding or a pending criminal investigation.

(f)

(g) The Franchise Tax Board may prescribe those regulations as may be necessary to administer and carry out the purposes of this section.

SEC. 2.

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