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Among the measures being considered by the California Legislature are several bills involving tax credits. Here is a summary of those bills. Due to the volume of bills, we can only provide a brief summary of each. For a more complete description of the bills, along with our analysis, visit our Laws and Legislation webpage. The address is:

Assembly Bill 26 (Nation)
This bill would allow individuals a credit for contributions to a Scholarshare account or to a qualified state tuition program in another state made on behalf of any qualified beneficiary. The credit amount would equal five percent, 12.5 percent, or 25 percent of the amount contributed, determined by the taxpayer's filing status and adjusted gross income. Taxpayers with adjusted gross income over $75,000 ($150,000 for married couples filing a joint return or a head of household) would not be eligible to receive the credit. The credit would be limited to $500 per qualified beneficiary.

AB 39 (Thomson)
This bill would provide an eligible employer a refundable credit for providing health coverage for an eligible individual and for that individual's dependent(s). The credit would equal 50 percent of the total amount paid or incurred per month for health coverage provided by the employer. The employer would be required to pay at least 75 percent of the monthly premiums and meet a number of other requirements.

AB 94 (Daucher)
This bill would allow a credit equal to the total price paid or incurred by a qualified person for emission reduction credits purchased for an electrical generating facility. 

A qualified person would mean any person who owns or operates a facility in this state that generates electricity and agrees to offer to sell the electricity generated to purchasers within this state before offering that electricity to purchasers outside this state.

AB 106 (Cedillo)
This bill would create a state credit based on the federal earned income credit. The state credit would equal 15 percent of the federal credit reduced by the alternative minimum tax.

AB 149 (Zettel)
This bill would extend the application of the recently enacted teacher retention credit to credentialed specialists, as defined by the Education Code.

AB 166 (Cedillo)
This bill would establish a 25 percent credit for the certified rehabilitation of a certified historic structure within a redevelopment area. The amount eligible for the credit would be based on the federal rehabilitation credit. 

Excess credit amounts could be carried over until exhausted.

AB 246 (Bill Campbell)
This bill would increase from 50 to 100 percent of the costs paid or incurred that may qualify a taxpayer for a credit for adopting any minor child who is a citizen or legal resident of the United States and was in the custody of a public agency. The credit would continue to be limited to $2,500 per minor child.

AB 350 (Rod Pacheco)
This bill would allow taxpayers who are 65 years of age or older, as of December 31 of the taxable year, a 20 percent credit for qualified medical expenses provided the taxpayer met certain requirements.

AB 462 (Wyland)
This bill would allow a 50 percent credit for the amount paid or incurred for qualified expenses in connection with lending a qualified employee to a public high school or community college located in this state.

Legislative analyses on Internet

On our website you can find pertinent information about the legislation we are tracking.

Go to and click on the Law and Legislation button. There you will find a preview of proposed tax law changes and our analysis of how they might affect your clients if the legislation becomes law.

We also post proposed and final regulations, legal notices and rulings, and links to the Revenue and Taxation Code and the California Code of Regulations.

You can find the full text of bills, resolutions, and constitutional amendments, and their status, history, votes, analyses, and veto messages at, the Official California Legislation Information website.

Continued on page 7

July/August 2001

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