Personal income taxes: gross income: exclusion: student loan assistance.
Impact
The enactment of AB152 is set to affect the personal income tax landscape in California significantly. By enabling tax-exempt financial aid for student loan repayments provided by employers, the bill aims to facilitate a reduction in student loan burdens for many Californians. The measure is designed to directly address the larger challenge of rising student debts, as it encourages responsible repayment practices by providing tax incentives that can potentially decrease default rates among borrowers.
Summary
Assembly Bill 152, known as AB152, introduces provisions for the exclusion of certain amounts from the gross income of employees concerning educational assistance provided by employers. Specifically, the bill amends Section 17151 of the Revenue and Taxation Code to permit employers to exclude up to $5,250 per calendar year from employees' gross income for amounts paid towards the repayment of qualified education loans, a measure effective from January 1, 2019, to January 1, 2024. Additionally, employees may benefit up to $10,500 across this period, leveraging employer support in tackling arising student loan debts.
Sentiment
The prevailing sentiment around AB152 is largely supportive, with many legislators and stakeholders advocating for it as a positive approach to combat the growing student debt crisis. Proponents argue that the bill represents a proactive measure to promote financial health among employees and facilitate educational advancement. However, like many financial legislations, there are voices of contention that express concern regarding the fiscal implications of tax exclusions on state revenues in the long term.
Contention
Critics highlight potential drawbacks, particularly regarding the impact on state tax revenue and budget allocations. They argue that the bill may disproportionately benefit higher-income employees whose employers can afford to provide such educational assistance. Additionally, there's a concern about the effective monitoring and enforcement of these provisions to ensure they truly aid those in genuine need rather than disproportionately benefiting privileged employees within certain sectors.
Voluntary tax contributions: California Firefighters’ Memorial Voluntary Tax Contribution Fund: California Peace Officer Memorial Foundation Voluntary Tax Contribution Fund.