Personal income taxes: unemployment insurance: fitness benefit.

Plain English Breakdown

The bill summary and digest do not provide specific details on how much money employers can give for fitness benefits beyond defining 'qualified fitness benefit'.

Personal Income Taxes: Unemployment Insurance: Fitness Benefit

AB-2533 allows employers to provide tax-free fitness benefits to full-time employees starting in 2026 and excludes these benefits from unemployment insurance calculations up to $600 per year.

What This Bill Does

• Allows a deduction for qualified fitness benefits provided by an employer to an employee, excluding them from gross income starting in taxable years beginning on or after January 1, 2026.
• Defines 'qualified fitness benefit' as fees or dues for membership in a fitness center, health club, or gym.
• Excludes up to $600 per year of qualified fitness benefits provided by an employer from the definition of wages used for unemployment insurance calculations.

Who It Names or Affects

• Employers who provide fitness benefits to full-time employees.
• Full-time employees receiving tax-free fitness benefits from their employers.
• The state's unemployment insurance system, which will exclude certain fitness benefits from wage calculations up to $600 per year.

Terms To Know

Qualified Fitness Benefit

Fees or dues for membership in a fitness center, health club, or gym provided by an employer to full-time employees.

Tax Expenditure

A reduction in tax revenue resulting from specific provisions of the tax code, such as allowing certain benefits to be excluded from taxes.

Limits and Unknowns

• The bill does not specify a limit on the amount of fitness benefits an employer can provide.
• It is unclear what happens if an employer provides more than $600 in qualified fitness benefits per year to an employee for unemployment insurance purposes.

Official Summary Text

AB 2533, as amended, Tangipa.
Personal
Income Tax Law: exclusions:
income taxes: unemployment insurance:
fitness benefit.
The Personal Income Tax Law, in
modified
conformity with federal income tax law,
generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.
allows various deductions from gross income in calculating adjusted gross income.
This bill, for taxable years beginning on or after January 1, 2026, would
exclude
allow a deduction
from gross income
for
any qualified fitness benefit provided by an employer to an employee, as specified. The bill would define “qualified fitness benefit”
to include, among other things,
as a uniform stipend amount to all full-time employees for
fees or dues for membership in a fitness center, health club, or gym, except as specified.
Existing law requires specified employers to contribute to the Unemployment Fund based on wages paid for employment. Existing law defines “wages” for this purpose, as provided, and excludes from that
definition, among other things, remuneration in excess of $7,000 paid to an individual by an employer during any calendar year, with respect to employment.
This bill would additionally exclude from that definition of wages any qualified fitness benefit provided by an employer to an employee, up to $600 per year, as specified.
Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals 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.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF