Taxation: Personal Income Tax Law: cost-of-living refundable tax credit.

Plain English Breakdown

The official source material does not provide specific details about eligibility criteria based on filing status and residence.

Cost-of-Living Refundable Tax Credit

The bill allows for a refundable tax credit based on the cost of living for certain taxpayers from 2027 to 2031.

What This Bill Does

• Creates a new refundable tax credit called the 'cost-of-living credit' for eligible taxpayers starting in 2027 and ending in 2031.
• Sets rules for how much money someone can get from this credit, including what happens if the credit is more than the tax owed.
• Excludes any refund received under this credit from being counted as income.

Who It Names or Affects

• Taxpayers who meet the eligibility requirements set by the bill.

Terms To Know

Refundable Tax Credit

A tax credit that can result in a refund if it is more than the amount of tax owed.

Tax Relief and Refund Account

An account from which refunds are paid to taxpayers.

Limits and Unknowns

• The bill did not pass committee and was reconsidered but failed again.
• It is unclear exactly how many people will qualify for the credit or how much it will cost.

Official Summary Text

SB 1277, as introduced, Grove.
Taxation: Personal Income Tax Law: cost-of-living refundable tax credit.
The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account.
This bill would allow, for each taxable year beginning on or after January 1, 2027, and before January 1, 2032, a cost-of-living credit against those taxes to a qualified taxpayer, as defined, in a qualified amount, calculated as provided based on the taxpayer’s filing and residence status. The bill would require the amount of the credit exceeding the taxpayer’s liability to be credited against other amounts due, if any, and would require the balance to be paid from the Tax Relief and Refund Account and refunded to the taxpayer. By
increasing the payments from the Tax Relief and Refund Account, a continuously appropriated fund, the bill would make an appropriation.
The Personal Income Tax Law generally defines “gross income” as income from whatever source derived and provides various exclusions from gross income.
This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, provide an exclusion from gross income those amounts received as a refund under the above-described cost-of-living tax credit.
This bill would make legislative findings and declarations related to a gift of public funds and other related findings and declarations.

Current Bill Text

Download Bill PDF