Personal income taxes: exemption credit: dependents.

Plain English Breakdown

The bill summary and digest do not provide information about what happens after January 1, 2031.

Increase in Dependent Exemption Credit

The bill increases the dependent exemption credit for personal income taxes from $475 to $700 and requires inflation adjustments starting January 1, 2027.

What This Bill Does

• Increases the dependent exemption credit from $475 to $700 for taxable years beginning on or after January 1, 2026, and before January 1, 2031.
• Requires the Franchise Tax Board to adjust the credit amount for inflation starting in 2027.

Who It Names or Affects

• Taxpayers with dependents who file personal income taxes.

Terms To Know

Dependent

A person for whom a taxpayer can claim an exemption on their tax return, such as a child or relative.

Inflation adjustment

An increase in the value of money to account for rising prices over time.

Limits and Unknowns

• The bill does not specify what happens after January 1, 2031.
• It is unclear how many taxpayers will be affected by this change.

Official Summary Text

SB 1144, as introduced, Valladares.
Personal income taxes: exemption credit: dependents.
The Personal Income Tax law authorizes an exemption credit of $227 for each dependent of a taxpayer for each taxable year beginning on or after January 1, 1999, adjusted for inflation, which may be reduced if a taxpayer’s federal adjusted gross income exceeds a threshold amount. The credit amount for the 2025 taxable year is $475.
This bill would increase that credit to $700 for taxable years beginning on or after January 1, 2026, and before January 1, 2031, and would require that the Franchise Tax Board adjust that amount for inflation for taxable years beginning on or after January 1, 2027, as prescribed.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF