Plain English Breakdown
The official text states the bill 'would' make changes, but metadata indicates it passed; however, no final effective date or specific new age number is provided in the source material.
AB-397: Changing the Age Rule for the Young Child Tax Credit
This law changes the age rule for children to qualify for a tax credit starting in taxable years beginning on or after January 1, 2025.
What This Bill Does
- Changes the definition of a 'qualifying child' from under 6 years old to younger than a specified age as of the last day of the year.
- Applies these changes to tax years that begin on or after January 1, 2025.
- Increases payments made from the Tax Relief and Refund Account for amounts over what is owed in taxes.
- Includes specific goals, performance indicators, and data collection rules required by law for new tax spending.
Who It Names or Affects
- Taxpayers who claim a young child tax credit on their state income tax return.
- Children whose age determines if they qualify for the credit under the new rule.
- The Tax Relief and Refund Account, which provides funds for these payments.
Terms To Know
- Young Child Tax Credit
- A reduction in state income tax or a cash payment given to taxpayers with young children.
- Qualifying Child
- A child who meets specific age and other rules set by the law to make their parent eligible for the credit.
- Tax Relief and Refund Account
- A state fund that holds money used to pay tax credits when they are larger than the taxes owed.
Limits and Unknowns
- The official text does not say exactly what the new age limit is, only that it will be a 'specified age.'
- The effective date for this law has not been listed in the provided information.
- The specific amount of money added to payments from the Tax Relief and Refund Account is not detailed.