AB763:v96#DOCUMENTBill Start
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Amended
IN
Assembly
April 05, 1999
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Amended
IN
Assembly
May 11, 1999
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Amended
IN
Assembly
May 24, 1999
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CALIFORNIA LEGISLATURE—
1999–2000 REGULAR SESSION
Assembly Bill
No. 763
Introduced by
Assembly Member
Bates, Knox
(Principal Coauthor(s):
Assembly Member
Oller)
(Coauthor(s):
Assembly Member
Baldwin, Battin, Campbell, Cox, Leach, Robert Pacheco, Runner, Scott, Strickland)
(Coauthor(s):
Senator
Knight, Lewis)
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February 24, 1999 |
An act to add and repeal Section 17052.3 to of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 763, as amended, Bates.
Income taxes: credit: adoption.
The Personal Income Tax Law allows a credit against the taxes imposed by that law in an amount equal to 50% of the costs, as specified, paid or incurred by a taxpayer for the adoption of any minor child who is a citizen or legal resident of the United States and was in the custody of a public agency of either this state or a political subdivision of this state.
This bill would, for taxable years beginning on or after January 1, 1999, and before January 1, 2005, provide conformity to the credit for adoption expenses allowed by federal income tax laws for adoptions that are not eligible for the existing state income tax credit, with specified exceptions and modifications. This bill would state the intent of the Legislature that the tax credit established by this bill apply so long as federal income tax law provides for a tax credit for adoption-related expenses, and would require the Franchise Tax Board to annually report, as provided, to the Legislature with respect to tax credits claimed and allowed for adoption-related expenses.
This bill would take effect immediately as a tax levy.
Digest Key
Vote:
MAJORITY
Appropriation:
NO
Fiscal Committee:
YES
Local Program:
NO
Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17052.3 is added to the Revenue and Taxation Code, to read:17052.3.
For each taxable year beginning on or after January 1, 1999, and before January 1, 2005, for expenses of an adoption not eligible for the credit under Section 17052.25, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, in an amount equal to 50 percent of the amount determined in accordance with Section 23 of the Internal Revenue Code, modified as follows:(a) Section 23(b)(1) of the Internal Revenue Code, relating to dollar limitation on the aggregate amount of qualified adoption expenses to which the credit applies, is modified to include only those qualified adoption expenses that exceed five thousand dollars ($5,000), (six thousand dollars ($6,000) in the case of a child with special needs) but do not exceed ten thousand dollars ($10,000) (eleven thousand dollars ($11,000) in the case of a child with special needs).
(b) Section 23(d) of the Internal Revenue Code, relating to carryforwards of unused credit, does not apply. If 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 years if necessary, until the credit is exhausted.
(c) Section 23(d)(2) of the Internal Revenue Code, relating to the definition of an eligible child, is modified to read as follows: The term “eligible child” means any individual who meets at least one of the following requirements:
(1) Has not attained age 18, or 18.
(2) Is physically or mentally incapable of caring for himself or herself.
(3) Is a child with special needs.
(d) This section shall remain in effect only until December 1, 2005, and as of that date is repealed.
SEC. 2.
(a) It is the intent of the Legislature that the tax benefits provided by this act be available for as long as a credit is available with respect to federal income taxes for expenses incurred in the adoption process.(b) In 2001 and each year thereafter, with respect to taxable years beginning on or after January 1 of the immediately preceding calendar year and before January 1 of the current calendar year, the Franchise Tax Board shall report to the Legislature both of the following:
(1) The number of credits claimed and credits allowed under Section 17052.25 of the Revenue and Taxation Code and under Section 17052.3 of that same code.
(2) To the extent the information is available, the distribution by adjusted gross income class of taxpayers allowed either of the credits described in paragraph (1).
SEC. 3.
This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.