Personal Income Tax Law: young child tax credit.

Plain English Breakdown

The official source does not provide specific details on the exact amount of additional funding needed or how many more families will qualify due to the expanded age limit.

Young Child Tax Credit Expansion

AB-1690 changes the definition of 'qualifying child' to gradually increase the age limit for young children eligible for a tax credit until reaching 18 years old by 2038 and expands payments from the Tax Relief and Refund Account.

What This Bill Does

• Gradually increases the age limit for a qualifying child in the Young Child Tax Credit program, starting with each year adding one more year until reaching 18 years old by 2038.
• Expands the amount of money available from the Tax Relief and Refund Account to cover these expanded tax credits.

Who It Names or Affects

• Taxpayers with young children under a certain age who qualify for the Young Child Tax Credit.
• The state's Tax Relief and Refund Account which will provide more funds to cover expanded tax credits.

Terms To Know

Qualifying child

A child younger than a specified age as of the last day of the taxable year, who meets certain criteria for receiving a tax credit.

Tax Relief and Refund Account

A continuously appropriated fund used to provide payments in excess of tax liability to eligible taxpayers.

Limits and Unknowns

• The bill does not specify the exact amount of additional funding needed for the Tax Relief and Refund Account.
• It is unclear how many more families will qualify due to the expanded age limit.

Official Summary Text

AB 1690, as amended, Ahrens.
Personal Income Tax Law: young child tax credit.
The Personal Income Tax Law allows various credits against the taxes imposed by that law, including a young child tax credit to a qualified taxpayer in a specified amount multiplied by the earned income tax credit adjustment factor, as provided. That law also allows a payment from the continuously appropriated Tax Relief and Refund Account for an amount in excess of tax liability. Existing law defines “qualified taxpayer” for this purpose to include an eligible individual, as defined, who has a qualifying child, defined to be a child younger than 6 years of age as of the last day of the taxable year, and who meets other specified criteria.
This bill, for taxable years beginning on or after January 1, 2026,
and before January 1, 2038,
would instead define a “qualifying child” to mean a child younger than
a specified age as of the last day of the
taxable year, as described.
the age limit from the prior taxable year plus one year, as described. The bill, for taxable years beginning on or after January 1, 2038, would define “qualifying child” as being a child younger than 18 years of age, as described.
By increasing the payments from the Tax Relief and Refund Account, a continuously appropriated fund, the bill would make an appropriation.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.

Current Bill Text

Download Bill PDF