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AB-736 Taxation: savings plans: qualified ABLE program.(2019-2020)

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Date Published: 02/19/2019 09:00 PM
AB736:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 736


Introduced by Assembly Member Irwin

February 19, 2019


An act to amend Sections 17140.3 and 23711 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 736, as introduced, Irwin. Taxation: savings plans: qualified ABLE program.
Existing federal law, the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act), for taxable years beginning on or after January 1, 2014, encourages and assists individuals and families to save private funds 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. Existing federal law, the Tax Cuts and Jobs Act exempts from taxation distributions from a qualified tuition program, as defined, rolled into an ABLE account.
Existing law, the Personal Income Tax Law and the Corporation Tax Law, for taxable years beginning on or after January 1, 2016, conforms to these federal income tax law provisions relating to the ABLE Act, as provided. Existing law creates the ABLE Act Board and requires the board to provide an annual listing of distributions to individuals that have an interest in an ABLE account to the Franchise Tax Board, as provided.
This bill, for taxable years beginning on or after January 1, 2019, and before January 1, 2026, would conform to those changes made by the Tax Cuts and Jobs Act with respect to rollovers to ABLE accounts from a qualified tuition program account.
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 17140.3 of the Revenue and Taxation Code is amended to read:

17140.3.
 Section 529 of the Internal Revenue Code, relating to qualified state tuition programs, shall apply, except as otherwise provided.
(a) Section 529 (a) of the Internal Revenue Code Code, relating to general rule, is modified as follows:
(1) By substituting the phrase “under this part and Part 11 (commencing with Section 23001)” in lieu of the phrase “under this subtitle.”
(2) By substituting “Article 2 (commencing with Section 23731)” in lieu of “Section 511.”
(b) A copy of the report required to be filed with the Secretary of the Treasury under Section 529(d) of the Internal Revenue Code Code, relating to reports, shall be filed with the Franchise Tax Board at the same time and in the same manner as specified in that section.
(c) For taxable years beginning on or after January 1, 2019, and before January 1, 2026, the amendments to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, made by Section 11025 of Public Law 115-97, relating to rollovers to ABLE programs from 529 programs, shall apply.

SEC. 2.

 Section 23711 of the Revenue and Taxation Code is amended to read:

23711.
 Section 529 of the Internal Revenue Code, relating to qualified state tuition programs, shall apply, except as otherwise provided.
(a) Section 529(a) of the Internal Revenue Code Code, relating to general rule, is modified as follows:
(1) By substituting the phrase “under Part 10 (commencing with Section 17001) and this part” in lieu of the phrase “under this subtitle.”
(2) By substituting “Article 2 (commencing with Section 23731)” in lieu of “section 511.”
(b) A copy of the report required to be filed with the Secretary of the Treasury under Section 529(d) of the Internal Revenue Code Code, relating to reports, shall be filed with the Franchise Tax Board at the same time and in the same manner as specified in that section.
(c) For taxable years beginning on or after January 1, 2019, and before January 1, 2026, the amendments to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, made by Section 11025 of Public Law 115-97, relating to rollovers to ABLE programs from 529 programs, shall apply.

SEC. 3.

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