CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 477Introduced by Senator WieckowskiFebruary 21, 2019 An act to add Sections 17061.6 and 17205 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 477, as introduced, Wieckowski. Personal income taxes: credit: qualified education loan. The Personal Income Tax Law allows various credits against the taxes imposed by that law and various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for interest paid or incurred on qualified education loans not to exceed $2,500. This bill, for taxable years beginning on or after January 1, 2019, would eliminate that deduction and allow a credit against those taxes in an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan, as defined.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 17061.6 is added to the Revenue and Taxation Code, to read:17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.SEC. 2. Section 17205 is added to the Revenue and Taxation Code, to read:17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.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.
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 477Introduced by Senator WieckowskiFebruary 21, 2019 An act to add Sections 17061.6 and 17205 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 477, as introduced, Wieckowski. Personal income taxes: credit: qualified education loan. The Personal Income Tax Law allows various credits against the taxes imposed by that law and various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for interest paid or incurred on qualified education loans not to exceed $2,500. This bill, for taxable years beginning on or after January 1, 2019, would eliminate that deduction and allow a credit against those taxes in an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan, as defined.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION
Senate Bill No. 477
Introduced by Senator WieckowskiFebruary 21, 2019
Introduced by Senator Wieckowski
February 21, 2019
An act to add Sections 17061.6 and 17205 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 477, as introduced, Wieckowski. Personal income taxes: credit: qualified education loan.
The Personal Income Tax Law allows various credits against the taxes imposed by that law and various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for interest paid or incurred on qualified education loans not to exceed $2,500. This bill, for taxable years beginning on or after January 1, 2019, would eliminate that deduction and allow a credit against those taxes in an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan, as defined.This bill would take effect immediately as a tax levy.
The Personal Income Tax Law allows various credits against the taxes imposed by that law and various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for interest paid or incurred on qualified education loans not to exceed $2,500.
This bill, for taxable years beginning on or after January 1, 2019, would eliminate that deduction and allow a credit against those taxes in an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan, as defined.
This bill would take effect immediately as a tax levy.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 17061.6 is added to the Revenue and Taxation Code, to read:17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.SEC. 2. Section 17205 is added to the Revenue and Taxation Code, to read:17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.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.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 17061.6 is added to the Revenue and Taxation Code, to read:17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.
SECTION 1. Section 17061.6 is added to the Revenue and Taxation Code, to read:
### SECTION 1.
17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.
17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.
17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.(b) For purposes of this section:(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.(C) Qualified education loan does not include the following:(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.
17061.6. (a) For each taxable year beginning on or after January 1, 2019, there shall be allowed as a credit against the net tax, as defined in Section 17039, an amount equal to the interest paid or incurred by the taxpayer during the taxable year on a qualified education loan.
(b) For purposes of this section:
(1) Dependent has the same meaning as the term defined by Section 152 of the Internal Revenue Code, relating to dependent defined, determined without regard to Sections 152(b)(1), Section 152(b)(2), and Section (d)(1)(B) of Section 152 of the Internal Revenue Code.
(2) (A) Qualified education loan means an indebtedness incurred by the taxpayer solely to pay for higher education expenses that are incurred on behalf of the taxpayer or the taxpayers spouse or dependent, who is the taxpayers spouse or dependent at the time the indebtedness is incurred.
(B) Qualified education loan includes indebtedness used to refinance indebtedness that qualified as a qualified education loan.
(C) Qualified education loan does not include the following:
(i) Indebtedness owed to a person who is related, within the meaning of Section 267(b) or 707(b) of the Internal Revenue Code, relating to relationships and certain sales or exchanges of property with respect to controlled partnerships, respectively.
(ii) Indebtedness owed to a person by reason of a loan under a qualified employer plan, as defined in Section 72(p)(4) of the Internal Revenue Code, relating to qualified employer plan, etc., or under a contract referred to in Section 72(p)(5) of the Internal Revenue Code, relating to special rules for loans, etc. from certain contracts.
SEC. 2. Section 17205 is added to the Revenue and Taxation Code, to read:17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.
SEC. 2. Section 17205 is added to the Revenue and Taxation Code, to read:
### SEC. 2.
17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.
17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.
17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.
17205. For taxable years beginning on or after January 1, 2019, Section 221 of the Internal Revenue Code, relating to interest on education loans, shall not apply under subdivision (b) of Section 17201.
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.
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.
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.
### SEC. 3.