Plain English Breakdown
The term 'qualified taxpayer' is referenced but not explicitly defined in the provided text excerpts.
Tax Exclusion for Wildfire Costs and Insurance Proceeds
AB-376 allows certain taxpayers to exclude money received for wildfire losses or insurance payouts from their taxable income during specific years.
What This Bill Does
- Excludes amounts received for costs and losses linked to wildfires from gross income for tax years starting between January 1, 2023, and before January 1, 2028.
- Excludes qualified insurance proceeds from gross income for tax years starting between January 1, 2025, and before January 1, 2030.
- Defines 'qualified insurance proceeds' as money received under homeowner or renter policies for fire damages in areas declared a state of emergency by the Governor.
- Includes required goals, performance indicators, and data collection details because it creates a new tax expenditure.
Who It Names or Affects
- Qualified taxpayers who receive money for wildfire costs or losses.
- Homeowners with insurance policies covering fire damages in emergency areas.
- Renters with insurance policies covering fire expenses in emergency areas.
Terms To Know
- Gross income
- Total money earned from all sources before any taxes or deductions are taken out, as defined by state law to match federal rules.
- Tax expenditure
- A reduction in tax revenue caused by a special rule that excludes certain amounts from being taxed.
- Qualified insurance proceeds
- Money paid out by homeowner or renter insurance for fire damage in areas where the Governor declared an emergency.
Limits and Unknowns
- The bill does not define exactly who counts as a 'qualified taxpayer' beyond linking them to wildfire costs and insurance proceeds.
- The specific calendar year effective date is listed only as taking effect immediately, without a specific start date provided in the text.