California Assembly Bill AB2606 Amended / Bill

 BILL NUMBER: AB 2606AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 15, 2014 AMENDED IN ASSEMBLY MARCH 20, 2014 INTRODUCED BY Assembly Member Dababneh FEBRUARY 21, 2014 An act to add and repeal Section 17053.81 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 2606, as amended, Dababneh. Income taxes: credit: long-term care. The Personal Income Tax Law allows various credits against the taxes imposed by that law. This bill would, for each taxable year beginning on or after January 1, 2015, and before January 1, 2020, allow a credit to a taxpayer in an amount equal to $500 multiplied by the number of applicable individuals, as defined, with respect to whom the taxpayer is an eligible caregiver during that taxable year. This bill would take effect immediately as a tax levy. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 17053.81 is added to the Revenue and Taxation Code, to read: 17053.81. (a) For each taxable year beginning on or after January 1, 2015, and before January 1, 2020, there shall be allowed to a taxpayer as a credit against the "net tax," as defined in Section 17039, an amount equal to five hundred dollars ($500) multiplied by the number of applicable individuals for whom the taxpayer is an eligible caregiver during the taxable year. (b) For purposes of this section: (1) (A) "Applicable individual" means an individual who has been certified before the due date for filing the return of tax, without extensions, for the taxable year by a physician as being an individual with long-term care needs for a period of time that is at least 180 consecutive days and a portion of that time occurs within the taxable year. (B) "Applicable individual" shall not include an individual otherwise meeting the requirements of subparagraph (A) unless within the preceding 391/2 month period ending on the due date in subparagraph (A) a physician has certified that the individual meets those requirements. (2) "An individual with long-term care needs" means an individual who meets any of the following: (A) The individual is at least six years of age and meets either of the following: (i) The individual is unable to perform at least three activities of daily living, as defined in Section 7702B(c)(2)(B) of the Internal Revenue Code, without substantial assistance from another individual due to a loss of functional capacity. (ii) The individual requires substantial supervision to protect that individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least one activity of daily living, as defined in Section 7702B(c)(2)(B) of the Internal Revenue Code, or the individual is unable to engage in age appropriate activities, to the extent provided by the Franchise Tax Board in consultation with the Secretary of the California Health and Human Services Agency. (B) The individual is at least two years of age but less than six years of age and is unable to perform without substantial assistance from another individual due to a loss of functional capacity at least two of the following activities: eating, transferring, or mobility. (C) The individual is under two years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled health care practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent. (3) "Physician" has the same meaning as that term is defined in Section  1935x(r)(1)   213(d)(4)  of the Internal Revenue Code. (c) (1) A taxpayer shall be treated as an "eligible caregiver" for each taxable year for any  of  the following applicable individuals: (A) The taxpayer. (B) The taxpayer's spouse. (C) An individual for whom the taxpayer is allowed a credit under subdivision (d) of Section 17054 for the taxable year. (2) The requirements of this subdivision are met if an applicable individual has as his or her principal place of abode the home of the taxpayer and either of the  following:   following applies:  (A) In the case of an applicable individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, the applicable individual is a member of the taxpayer's household for  over half   more than one-half  the taxable year. (B) In the case of any other applicable individual, the applicable individual is a member of the taxpayer's household for the entire taxable year. (3) (A) Only one taxpayer shall be treated as an eligible caregiver for an applicable individual. If more than one taxpayer qualifies as an eligible caregiver for an applicable individual for taxable years ending with or within the same calendar year, the taxpayer who will not claim the applicable individual shall file a written declaration, in the form and manner as the Franchise Tax Board may prescribe, stating that he or she will not claim the applicable individual for the credit allowed under this section. (B) If no declaration is filed under subparagraph (A), the taxpayer with the highest  federal modified adjusted gross income, as defined in Section 32(c)(2) of the Internal Revenue Code,   adjusted gross income  shall be treated as the eligible caregiver. (C) In the case of married individuals filing separate returns, the determination as to which taxpayer is the eligible caregiver shall be made pursuant to subparagraph (B), regardless of whether or not one of them has filed a written declaration pursuant to subparagraph (A). (d) (1) A credit shall not be allowed under this section unless the taxpayer includes the name and taxpayer identification number of the  eligible   applicable  individual and the identification number or national provider identifier of the physician certifying the applicable individual on the return of tax for the taxable year. (2) The denial of any credit under paragraph (1) may be made pursuant to Section 19051. (e) The taxpayer shall retain the physician certification required pursuant to paragraph (1) of subdivision (b) for  three years   four years from the date the return claiming the credit was filed  and shall make that certification available to the Franchise Tax Board upon request during that period. (f) A credit shall not be allowed under this section for any eligible caregiver whose adjusted gross income for the taxable year is equal to or greater than one hundred thousand dollars ($100,000) in the case of a married couple filing a joint return, and fifty thousand dollars ($50,000) in the case of all other individuals. (g) This section shall remain in effect only until December 1, 2020, and as of that date is repealed. SEC. 2. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.