Personal Income Tax Law: young child tax credit.

Plain English Breakdown

The exact age limit for a 'qualifying child' is not specified in the official source material.

Young Child Tax Credit

AB-397 changes the Personal Income Tax Law to expand the definition of 'qualifying child' for the young child tax credit and requires more information about new tax benefits.

What This Bill Does

• Expands the definition of a 'qualifying child' for the young child tax credit from under 6 years old to a specified age as of the last day of the taxable year, starting in 2025.
• Requires bills like AB-397 to include specific goals, performance indicators, and data collection requirements for new tax benefits.

Who It Names or Affects

• Taxpayers who have young children under a specified age as of the last day of their taxable year.
• The Tax Relief and Refund Account which will pay out more money due to this change.

Terms To Know

qualifying child

A child younger than a certain age who meets specific criteria for tax benefits.

Tax Relief and Refund Account

A fund that pays out money to taxpayers for various tax credits and refunds.

Limits and Unknowns

• The exact age limit for a 'qualifying child' is not specified in the summary.
• It's unclear how much more will be paid from the Tax Relief and Refund Account due to this change.

Official Summary Text

AB 397, as introduced, Mark González.
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, 2025, 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. 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