| Old | New | Differences | |
|---|---|---|---|
| 1 | - | ||
| 1 | + | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 509Introduced by Assembly Member Vince FongFebruary 07, 2023 An act to amend Section 17151 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 509, as introduced, Vince Fong. Personal income taxes: gross income: exclusion: student loan assistance.The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year.This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined, relating to interest on education loans, incurred by the employee for education of the employee. The bill would also make various technical changes to these provisions and delete obsolete language relating to graduate level educational assistance.Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described exclusion, and the performance indicators for determining whether the exclusion meets those goals, purposes, and objectives. 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 17151 of the Revenue and Taxation Code is amended to read:17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996.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. | |
| 2 | 2 | ||
| 3 | - | ||
| 3 | + | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Assembly Bill No. 509Introduced by Assembly Member Vince FongFebruary 07, 2023 An act to amend Section 17151 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTAB 509, as introduced, Vince Fong. Personal income taxes: gross income: exclusion: student loan assistance.The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year.This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined, relating to interest on education loans, incurred by the employee for education of the employee. The bill would also make various technical changes to these provisions and delete obsolete language relating to graduate level educational assistance.Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described exclusion, and the performance indicators for determining whether the exclusion meets those goals, purposes, and objectives. This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO | |
| 4 | 4 | ||
| 5 | - | Amended IN Assembly April 05, 2023 | |
| 6 | 5 | ||
| 7 | - | Amended IN Assembly April 05, 2023 | |
| 6 | + | ||
| 7 | + | ||
| 8 | 8 | ||
| 9 | 9 | CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION | |
| 10 | 10 | ||
| 11 | 11 | Assembly Bill | |
| 12 | 12 | ||
| 13 | 13 | No. 509 | |
| 14 | 14 | ||
| 15 | 15 | Introduced by Assembly Member Vince FongFebruary 07, 2023 | |
| 16 | 16 | ||
| 17 | 17 | Introduced by Assembly Member Vince Fong | |
| 18 | 18 | February 07, 2023 | |
| 19 | 19 | ||
| 20 | 20 | An act to amend Section 17151 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. | |
| 21 | 21 | ||
| 22 | 22 | LEGISLATIVE COUNSEL'S DIGEST | |
| 23 | 23 | ||
| 24 | 24 | ## LEGISLATIVE COUNSEL'S DIGEST | |
| 25 | 25 | ||
| 26 | - | AB 509, as | |
| 26 | + | AB 509, as introduced, Vince Fong. Personal income taxes: gross income: exclusion: student loan assistance. | |
| 27 | 27 | ||
| 28 | - | The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year.This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034 | |
| 28 | + | The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year.This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined, relating to interest on education loans, incurred by the employee for education of the employee. The bill would also make various technical changes to these provisions and delete obsolete language relating to graduate level educational assistance.Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described exclusion, and the performance indicators for determining whether the exclusion meets those goals, purposes, and objectives. This bill would take effect immediately as a tax levy. | |
| 29 | 29 | ||
| 30 | 30 | The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year. | |
| 31 | 31 | ||
| 32 | - | This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034 | |
| 32 | + | This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined, relating to interest on education loans, incurred by the employee for education of the employee. The bill would also make various technical changes to these provisions and delete obsolete language relating to graduate level educational assistance. | |
| 33 | 33 | ||
| 34 | 34 | Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. | |
| 35 | 35 | ||
| 36 | 36 | The bill would make specified findings detailing the goals, purposes, and objectives of the above-described exclusion, and the performance indicators for determining whether the exclusion meets those goals, purposes, and objectives. | |
| 37 | 37 | ||
| 38 | 38 | This bill would take effect immediately as a tax levy. | |
| 39 | 39 | ||
| 40 | 40 | ## Digest Key | |
| 41 | 41 | ||
| 42 | 42 | ## Bill Text | |
| 43 | 43 | ||
| 44 | - | The people of the State of California do enact as follows:SECTION 1. Section 17151 of the Revenue and Taxation Code is amended to read:17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 44 | + | The people of the State of California do enact as follows:SECTION 1. Section 17151 of the Revenue and Taxation Code is amended to read:17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996.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. | |
| 45 | 45 | ||
| 46 | 46 | The people of the State of California do enact as follows: | |
| 47 | 47 | ||
| 48 | 48 | ## The people of the State of California do enact as follows: | |
| 49 | 49 | ||
| 50 | - | SECTION 1. Section 17151 of the Revenue and Taxation Code is amended to read:17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 50 | + | SECTION 1. Section 17151 of the Revenue and Taxation Code is amended to read:17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. | |
| 51 | 51 | ||
| 52 | 52 | SECTION 1. Section 17151 of the Revenue and Taxation Code is amended to read: | |
| 53 | 53 | ||
| 54 | 54 | ### SECTION 1. | |
| 55 | 55 | ||
| 56 | - | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 56 | + | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. | |
| 57 | 57 | ||
| 58 | - | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 58 | + | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. | |
| 59 | 59 | ||
| 60 | - | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 60 | + | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program.(b) For purposes of this section, the following definitions shall apply: section:(1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following:(B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment.(C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. (D) Educational assistance does not include a payment for, or the provision of, any of the following:(A)(i) Any tools or supplies that may be retained by the employee after completion of a course of instruction.(B)(ii) Any meals, lodging, or transportation.(C)(iii) Any course or education involving sports, games, or hobbies.(D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000.(iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent.(2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements:(A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers.(B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer.(C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account.(D) The program need not be funded.(E) Reasonable notification of the availability and terms of the program is provided to eligible employees.(3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees.(c) For purposes of this section:(1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee.(2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b).(3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following:(i) Different utilization rates for the different types of educational assistance made available under the program.(ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program.(B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code.(d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section.(e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply.(f) It is the intent of the Legislature to apply the requirements of Section 41 to this act.(1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer.(2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians.(f)(g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. | |
| 61 | 61 | ||
| 62 | 62 | ||
| 63 | 63 | ||
| 64 | - | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program. | |
| 64 | + | 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is are paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program. | |
| 65 | 65 | ||
| 66 | - | (b) For purposes of this section: | |
| 66 | + | (b) For purposes of this section, the following definitions shall apply: section: | |
| 67 | 67 | ||
| 68 | - | (1) (A) Educational assistance means the payment by an employer of expenses incurred by, or on behalf of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. | |
| 68 | + | (1) (A) Educational assistance means the payment by an employer of expenses incurred by by, or on behalf of of, an employee for the employees education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. Educational assistance does not include any payment for, or the provision of, any of the following: | |
| 69 | 69 | ||
| 70 | 70 | (B) Educational assistance includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. | |
| 71 | 71 | ||
| 72 | - | (C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034 | |
| 72 | + | (C) Educational assistance includes a payment made by an employer on or after January 1, 2024, and before January 1, 2034, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of the employee. | |
| 73 | 73 | ||
| 74 | 74 | (D) Educational assistance does not include a payment for, or the provision of, any of the following: | |
| 75 | 75 | ||
| 76 | + | (A) | |
| 77 | + | ||
| 78 | + | ||
| 79 | + | ||
| 76 | 80 | (i) Any tools or supplies that may be retained by the employee after completion of a course of instruction. | |
| 81 | + | ||
| 82 | + | (B) | |
| 83 | + | ||
| 84 | + | ||
| 77 | 85 | ||
| 78 | 86 | (ii) Any meals, lodging, or transportation. | |
| 79 | 87 | ||
| 88 | + | (C) | |
| 89 | + | ||
| 90 | + | ||
| 91 | + | ||
| 80 | 92 | (iii) Any course or education involving sports, games, or hobbies. | |
| 93 | + | ||
| 94 | + | (D)Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000. | |
| 95 | + | ||
| 96 | + | ||
| 81 | 97 | ||
| 82 | 98 | (iv) A payment on a qualified education loan, as defined by Section 221 of the Internal Revenue Code, relating to interest on education loans, incurred by the employee for education of their spouse or dependent. | |
| 83 | 99 | ||
| 84 | - | (2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of their employees to provide those employees with educational assistance. The program shall meet the following requirements: | |
| 100 | + | (2) Educational assistance program means a separate written plan of an employer for the exclusive benefit of his or her their employees to provide those employees with educational assistance. The program shall meet the following requirements: | |
| 85 | 101 | ||
| 86 | - | (A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees, as defined by Section 414(q) of the Internal Revenue Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers. | |
| 102 | + | (A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of employees, as defined by Section 414(q) of the Internal Revenue Code) Code, relating to highly compensated employee, or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers. | |
| 87 | 103 | ||
| 88 | - | (B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners, or their spouses or dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer. | |
| 104 | + | (B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or owners, or their spouses or dependents), dependents, each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer. | |
| 89 | 105 | ||
| 90 | 106 | (C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account. | |
| 91 | 107 | ||
| 92 | 108 | (D) The program need not be funded. | |
| 93 | 109 | ||
| 94 | 110 | (E) Reasonable notification of the availability and terms of the program is provided to eligible employees. | |
| 95 | 111 | ||
| 96 | - | (3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code, relating to self-employed individuals treated as employees. | |
| 112 | + | (3) Employee includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. Code, relating to self-employed individuals treated as employees. | |
| 97 | 113 | ||
| 98 | 114 | (c) For purposes of this section: | |
| 99 | 115 | ||
| 100 | - | (1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as their own employee. | |
| 116 | + | (1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her their own employee. | |
| 101 | 117 | ||
| 102 | 118 | (2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b). | |
| 103 | 119 | ||
| 104 | 120 | (3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following: | |
| 105 | 121 | ||
| 106 | 122 | (i) Different utilization rates for the different types of educational assistance made available under the program. | |
| 107 | 123 | ||
| 108 | 124 | (ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program. | |
| 109 | 125 | ||
| 110 | 126 | (B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code. | |
| 111 | 127 | ||
| 112 | - | (d) A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section. | |
| 128 | + | (d) No A deduction or credit shall not be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section. | |
| 113 | 129 | ||
| 114 | - | (e) Section 127 of the Internal Revenue Code, relating to educational assistance programs, shall not apply. | |
| 130 | + | (e) Section 127 of the Internal Revenue Code Code, relating to educational assistance programs, shall not apply. | |
| 115 | 131 | ||
| 116 | 132 | (f) It is the intent of the Legislature to apply the requirements of Section 41 to this act. | |
| 117 | 133 | ||
| 118 | 134 | (1) The Legislature finds and declares that the goal of this exclusion is to ensure California addresses the student debt crisis that many people in the state face. Towards this end, this exclusion will help many Californians receive a tax incentive on student loan repayment plans that was provided on behalf of the student by the employer. | |
| 119 | 135 | ||
| 120 | 136 | (2) The effectiveness of the exclusion shall be measured by the decrease in student loan defaults, and increase in timely repayment of student loans, by Californians. | |
| 137 | + | ||
| 138 | + | (f) | |
| 139 | + | ||
| 140 | + | ||
| 121 | 141 | ||
| 122 | 142 | (g) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. | |
| 123 | 143 | ||
| 124 | 144 | 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. | |
| 125 | 145 | ||
| 126 | 146 | 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. | |
| 127 | 147 | ||
| 128 | 148 | 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. | |
| 129 | 149 | ||
| 130 | 150 | ### SEC. 2. |