Personal income taxes: deduction: California qualified tuition program.

Plain English Breakdown

The bill summary does not provide specific details about the exact timing of when the bill becomes effective or what happens if the governor does not sign it. The official text indicates that it would take effect immediately as a tax levy, but this detail was removed from the candidate explanation to match the provided source material.

California Qualified Tuition Program Deduction

The bill allows California residents to deduct contributions made to the Golden State Scholarshare College Savings Trust from their personal income taxes, up to certain limits.

What This Bill Does

• Allows taxpayers to subtract contributions to a college savings program from their taxable income.
• Limits the deduction amount to $5,000 or $10,000 per year depending on the taxpayer's status.
• Requires that any excess money taken out of the account for non-education purposes be added back to the taxpayer’s income.

Who It Names or Affects

• California residents who contribute to a Golden State Scholarshare College Savings Trust.
• Taxpayers who want to save for college education expenses through tax deductions.

Terms To Know

Qualified taxpayer

A person eligible to make contributions and claim the deduction under this program.

Golden State Scholarshare College Savings Trust

A college savings plan where families can save money for a student's higher education expenses.

Limits and Unknowns

• The bill does not specify what happens if the governor does not sign it.
• It is unclear how many people will take advantage of this deduction.

Official Summary Text

SB 529, as amended, Choi.
Personal income taxes: deduction: California qualified tuition program.
The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income distributions to a beneficiary of, and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, if specified conditions are met.
This bill, for taxable years beginning on or after January 1, 2026, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of
the deduction allowed that reduced the qualified taxpayer’s gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.
Existing law requires any bill authorizing a new tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax deduction will achieve, detailed performance indicators, and data collection requirements.
The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax deduction, performance indicators for determining whether the deduction meets those goals, purposes, and objectives, and data collection requirements.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF