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AB-1304 Public social services: CalKIDS: personal income taxes: exclusion.(2017-2018)

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Date Published: 04/17/2017 09:00 PM
AB1304:v98#DOCUMENT

Amended  IN  Assembly  April 17, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 1304


Introduced by Assembly Member Melendez

February 17, 2017


An act to add Article 20 (commencing with Section 69996) to Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code, and to add Section 17140.2 to the Revenue and Taxation Code, and to add Division 27 (commencing with Section 27000) to the Welfare and Institutions Code, relating to taxation. public social services.


LEGISLATIVE COUNSEL'S DIGEST


AB 1304, as amended, Melendez. Personal Public social services: CalKIDS: personal income taxes: exclusion: CalKIDS. exclusion.
The Golden State Scholarshare College Savings Trust, California’s 529 College Savings Plan, is administered by the Scholarshare Investment Board. Existing law authorizes the trust to enter into agreements with participants on behalf of beneficiaries subject to specified terms for higher education expenses. 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. Existing law establishes certain tax-advantaged savings accounts, including the federal Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), which encourages and assists individuals and families to save private funds in a tax-advantaged savings account for the purpose of supporting persons with disabilities to maintain their health, independence, and quality of life by excluding from gross income distributions used for qualified disability expenses by a beneficiary of a qualified ABLE program established and maintained by a state, as specified.
This bill would create the CalKIDS Savings Trust Fund Fund, administered by the State Department of Social Services, and savings accounts within that fund for each beneficiary for the purpose of encouraging and earmarking savings for the costs of child care, education, or other enrichment activities that will prepare the beneficiary for the future or higher education or for the purpose of taking care of elderly dependents. care, including, but not limited to, the costs of before and after school care. The bill, for taxable years beginning on or after January 1, 2018, would exclude from gross income the moneys deposited in a CalKIDS savings account.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.Article 20 (commencing with Section 69996) is added to Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code, to read:
20.CalKIDS Savings Accounts
69996.

(a)There is hereby created an instrumentality of the State of California to be known as the CalKIDS Savings Trust.

(b)There is established within the CalKIDS Savings Trust Fund, which is hereby created in the State Treasury, savings accounts for each beneficiary.

(c)The moneys deposited into each CalKIDS savings account shall be used to encourage and earmark savings for the costs of child care, education, or other enrichment activities that will prepare the beneficiary for the future or higher education. These moneys may also be used to take care of elderly dependents.

(d)The moneys deposited into CalKIDS savings accounts are excluded from gross income pursuant to Section 17140.2 of the Revenue and Taxation Code.

SEC. 2.SECTION 1.

 Section 17140.2 is added to the Revenue and Taxation Code, to read:

17140.2.
 For taxable years beginning on or after January 1, 2018, gross income does not include moneys deposited into a CalKIDS savings account established pursuant to Article 20 (commencing with Section 69996) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code. Division 27 (commencing with Section 27000) of the Welfare and Institutions Code.

SEC. 2.

 Division 27 (commencing with Section 27000) is added to the Welfare and Institutions Code, to read:

DIVISION 27. CalKIDS Savings Accounts

27000.
 (a) There is hereby created an instrumentality of the State of California to be known as the CalKIDS Savings Trust, which is administered by the State Department of Social Services.
(b) There is established within the CalKIDS Savings Trust Fund, which is hereby created in the State Treasury, savings accounts for each beneficiary.
(c) The moneys deposited into each CalKIDS savings account shall be used to encourage and earmark savings for the costs of child care. Eligible child care costs include, but are not limited to, all of the following:
(1) The costs of before and after school care.
(2) The costs of attendance at a preschool or nursery school.
(3) The costs of attendance at an extended day program.
(4) The actual amounts paid or incurred to an au pair service or nanny service for actual care of the dependent.
(5) The costs of a babysitter for care of a dependent in or out of the dependent’s home.
(6) The costs of attendance at a summer day camp for a dependent under 13 years of age.
(d) The moneys deposited into CalKIDS savings accounts are excluded from gross income pursuant to Section 17140.2 of the Revenue and Taxation Code.