Revenue and Taxation Code — Part 5 | RTC — United States — California law | Esheria

Revenue and Taxation Code

Part 5 of 36 · provisions 801–1,000

This section says the act is known as the Revenue and Taxation Code.

Jurisdiction
United States — California
Instrument
Code
Citation
RTC
Version
Undated source snapshot
Language
en
Official source
View official record ↗
Complete work
View statute overview
911 communications 911 emergency services 911 emergency systems 911 services 911 systems 988 Suicide and Crisis Lifeline ABLE programs CPI adjustment DMV administration Fedwire Franchise Tax Board Franchise Tax Board actions Franchise Tax Board administration Franchise Tax Board election Gross income LIFO accounting Medi-Cal managed care plans Roth IRA S corporation penalties S corporation reporting S corporation tax S corporations Secretary of State filings Taxable income +4,866 more

Statute overview

About this statute

Starting in the 1995–96 fiscal year, county-assessed property rights or interests must be placed in a separate countywide tax rate area, and the tax rate is calculated using the rates from Section 100. This section suspends a specified California constitutional subparagraph for the 2009–10 fiscal year. This section requires the county auditor to reduce certain 2009–10 property tax apportionments, transfer the reduction amounts to a county fund, and report the calculations. It also lets the Director of Finance grant limited hardship relief, requires later state reimbursement, and allows mandamus if reimbursement is not made on time. This section sets how certain railroad property tax value and revenues must be allocated among tax rate areas, counties, school entities, and related jurisdictions. Supplemental property tax revenues for 1985–86 and later years must be apportioned using the current year’s property tax apportionment factors.

Read the provisions Ask with citations

Legal text

Provisions of Revenue and Taxation Code

Showing 200 of 7,200

  1. 17053.98.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section creates a film tax credit for qualified taxpayers for qualified motion picture expenditures in California, subject to allocation, certification, and reporting rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17053.98.1. (a) (1) For taxable years beginning on or after January 1, 2025, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, subject to a computation and ranking by the California Film Commission in subdivision (g) and the allocation amount categories described in subdivision (i), in an amount equal to 35 or 40 percent, whichever is the applicable credit percentage described in paragraph (4), of the qualified expenditures for the production of a qualified motion picture in California. A credit shall not be allowed under this section for any qualified expenditures for the production of a motion picture in California if a credit has been claimed for those same expenditures under Section 17053.85, 17053.95, or 17053.98. (2) Except as otherwise provided in this section, the credit shall be allowed for the taxable year in which the California Film Commission issues the credit certificate pursuant to subdivision (g) for the qualified motion picture, but in no instance prior to July 1, 2025, and shall be for the applicable percentage of all qualified expenditures paid or incurred by the qualified taxpayer in all taxable years for that qualified motion picture. (3) (A) The amount of the credit allowed to a qualified taxpayer shall be limited to the amount specified in the credit certificate issued to the qualified taxpayer by the California Film Commission pursuant to subdivision (g). (B) In determining the amount specified in the credit certificate in subparagraph (A), the California Film Commission shall be limited to the following amounts of qualified expenditures for each qualified motion picture: (i) In the case of a feature, up to one hundred twenty million dollars ($120,000,000). (ii) In the case of a miniseries or limited series described in clause (ii) of subparagraph (A) of paragraph (19) of subdivision (b), up to one hundred twenty million dollars ($120,000,000). (iii) In the case of a television series described in clause (iii) or clause (v) of subparagraph (A) of paragraph (19) of subdivision (b), up to one hundred twenty million dollars ($120,000,000) per season. (iv) In the case of an independent film, up to twenty million dollars ($20,000,000). (4) For purposes of paragraphs (1) and (2), the applicable credit percentage shall be as follows: (A) Thirty-five percent of the qualified expenditures attributable to the production of a qualified motion picture in California, including, but not limited to, a feature or a television series that relocated to California that is in its second or subsequent years of receiving a tax credit allocation pursuant to this section, or Section 17053.85, 17053.95, or 17053.98. (B) Forty percent of the qualified expenditures attributable to the production of a qualified motion picture in California where the qualified motion picture is a television series that relocated to California in its first year of receiving a tax credit allocation pursuant to this section. (C) Thirty-five percent of the qualified expenditures attributable to the production of a qualified motion picture that is an independent film. (D) Additional credits shall be allowed for the production of a qualified motion picture which applicable credit percentage is determined pursuant to subparagraph (A), in an aggregate amount not to exceed 5 percent of the qualified expenditures under that subparagraph, as follows: (i) (I) Five percent of qualified expenditures, excluding qualified wages described in subparagraph (E), relating to original photography outside the Los Angeles zone. (II) For purposes of this clause and subparagraph (E): (ia) “Applicable period” means the period that commences with preproduction and ends when original photography concludes. The applicable period includes the time necessary to strike a remote location and return to the Los Angeles zone. (ib) “Los Angeles zone” means the area within a circle 30 miles in radius from Beverly Boulevard and La Cienega Boulevard, Los Angeles, California, and includes Agua Dulce, Castaic, including Castaic Lake, Leo Carrillo State Beach, Ontario International Airport, Piru, and Pomona, including the Los Angeles County Fairgrounds. The Metro-Goldwyn-Mayer, Inc. Conejo Ranch property is within the Los Angeles zone. (ic) “Original photography” includes principal photography and reshooting original footage. (id) “Qualified expenditures relating to original photography outside the Los Angeles zone” means amounts paid or incurred during the applicable period for tangible personal property purchased or leased and used or consumed outside the Los Angeles zone and relating to original photography outside the Los Angeles zone and qualified wages paid for services performed outside the Los Angeles zone and relating to original photography outside the Los Angeles zone. (ii) Five percent of the qualified expenditures relating to qualified visual effects attributable to the production of a qualified motion picture in California. (E) (i) Notwithstanding subparagraph (D), an amount equal to 10 percent of qualified wages paid for services performed relating to original photography outside of the Los Angeles zone to qualified individuals who reside in California but outside the Los Angeles zone shall be allowed as an additional credit for the production of a qualified motion picture which applicable credit percentage is determined pursuant to subparagraph (A) or (C). (ii) Notwithstanding subparagraph (D), an amount equal to 5 percent of qualified wages paid for services performed relating to original photography outside of the Los Angeles zone to qualified individuals who reside in California but outside the Los Angeles zone shall be allowed as an additional credit for the production of a qualified motion picture which applicable credit percentage is determined pursuant to subparagraph (B). (b) For purposes of this section: (1) “Ancillary product” means any article for sale to the public that contains a portion of, or any element of, the qualified motion picture. (2) “Budget” means an estimate of all expenses paid or incurred during the production period of a qualified motion picture. It shall be the same budget used by the qualified taxpayer and production company for all qualified motion picture purposes. (3) “Clip use” means a use of any portion of a motion picture, other than the qualified motion picture, used in the qualified motion picture. (4) “Credit certificate” means the certificate issued by the California Film Commission pursuant to subparagraph (D) of paragraph (3) of subdivision (g). (5) “Diversity workplan checklist” means a checklist developed by regulation by the California Film Commission that may include consideration of inclusive hiring above the line, inclusive hiring below the line, equity education, industry capacity building and supplier diversity as part of any diversity workplan. (6) (A) “Employee fringe benefits” means the amount allowable as a deduction under this part to the qualified taxpayer involved in the production of the qualified motion picture, exclusive of any amounts contributed by employees, for any year during the production period with respect to any of the following: (i) Employer contributions under any pension, profit sharing, annuity, or similar plan. (ii) Employer-provided coverage under any accident or health plan for employees. (iii) The employer’s cost of life or disability insurance provided to employees. (B) Any amount treated as wages under clause (i) of subparagraph (A) of paragraph (21) shall not be taken into account under this paragraph. (7) “Independent film” means a motion picture with a minimum budget of one million dollars ($1,000,000) that is produced by a company that is not publicly traded and publicly traded companies do not own, directly or indirectly, more than 30 percent of the producing company. (8) “Jobs ratio” means the amount of qualified wages paid to qualified individuals divided by the amount of tax credit, not including any additional credit allowed pursuant to subparagraphs (D) and (E) of paragraph (4) of subdivision (a), as computed by the California Film Commission. For the purposes of the calculation of the jobs ratio only, 70 percent of qualified expenditures for visual effects paid to third-party vendors for work performed in California shall be deemed to be qualified wages paid to a qualified individual. (9) “Licensing” means any grant of rights to distribute the qualified motion picture, in whole or in part. (10) “New use” means any use of a motion picture in a medium other than the medium for which it was initially created. (11) “Pilot for a new television series” means the initial episode produced for a proposed television series. (12) (A) “Postproduction” means the final activities in a qualified motion picture’s production, including editing, foley recording, automatic dialogue replacement, sound editing, scoring, music track recording by musicians and music editing, beginning and end credits, negative cutting, negative processing and duplication, the addition of sound and visual effects, sound mixing, film-to-tape transfers, encoding, and color correction. (B) “Postproduction” does not include the manufacture or shipping of release prints or their equivalent. (13) “Preproduction” means the process of preparation for actual physical production which begins after a qualified motion picture has received a firm agreement of financial commitment, or is greenlit, with, for example, the establishment of a dedicated production office, the hiring of key crew members, and includes, but is not limited to, activities that include location scouting and execution of contracts with vendors of equipment and stage space. (14) “Principal photography” means the phase of production during which the motion picture is actually shot, as distinguished from preproduction and postproduction. (15) “Production period” means the period beginning with preproduction and ending upon completion of postproduction. (16) “Qualified entity” means a personal service corporation as defined in Section 269A(b)(1) of the Internal Revenue Code, a payroll services corporation, or any entity receiving qualified wages with respect to services performed by a qualified individual. (17) “Qualified expenditures” means amounts paid or incurred for tangible personal property purchased or leased, and used, within this state in the production of a qualified motion picture and payments, including qualified wages, for services performed within this state in the production of a qualified motion picture. (18) (A) “Qualified individual” means any individual who performs services during the production period in an activity related to the production of a qualified motion picture. (B) “Qualified individual” shall not include either of the following: (i) Any individual related to the qualified taxpayer as described in subparagraph (A), (B), or (C) of Section 51(i)(1) of the Internal Revenue Code. (ii) Any 5-percent owner, as defined in Section 416(i)(1)(B) of the Internal Revenue Code, of the qualified taxpayer. (19) (A) “Qualified motion picture” means a motion picture that is produced for distribution to the general public, regardless of medium, that is one of the following: (i) A feature with a minimum production budget of one million dollars ($1,000,000). (ii) A miniseries or limited series consisting of two or more episodes, each longer than 40 minutes of running time, exclusive of commercials, that is produced in California, with a minimum production budget of one million dollars ($1,000,000) per episode. (iii) An independent film. (iv) A television series that relocated to California. (v) A pilot for a new live action or animated television series that is at least 20 minutes of running time, exclusive of commercials, that is produced in California, and with a minimum production budget of one million dollars ($1,000,000). (vi) A live action or animated series, averaging across a season at least 20 minutes of running time per episode, exclusive of commercials, that is produced in California, with a minimum production budget of one million dollars ($1,000,000) per episode. (vii) An animated film that is produced in California, with a minimum production budget of one million dollars ($1,000,000). (viii) A large-scale competition show, not including traditional reality, game shows, talk shows, or docufollow television programming, that is produced in California, with a minimum production budget of one million dollars ($1,000,000) per episode. (B) To qualify as a “qualified motion picture,” all of the following conditions shall be satisfied: (i) At least 75 percent of the principal photography days occur wholly in California or 75 percent of the production budget is incurred for payment for services performed within the state and the purchase or rental of property used within the state. (ii) Production of the qualified motion picture is completed within 30 months from the date on which the qualified taxpayer’s application is approved by the California Film Commission. For purposes of this section, a qualified motion picture is “completed” when the process of postproduction has been finished. (iii) The copyright for the motion picture is registered with the United States Copyright Office pursuant to Title 17 of the United States Code. (iv) (I) Except as provided in subclause (II), principal photography of the qualified motion picture commences after the date on which the application is approved by the California Film Commission, but no later than 180 days after the date of that approval if the qualified motion picture has a budget with qualified expenditures of less than one hundred million dollars ($100,000,000), and no later than 240 days after the date of that approval in the case of a qualified motion picture with a budget of qualified expenditures with at least one hundred million dollars ($100,000,000), unless death, disability, or disfigurement of the director or of a principal cast member; an act of God, including, but not limited to, fire, flood, earthquake, storm, hurricane, or other natural disaster; terrorist activities; or government sanction has directly prevented a production’s ability to begin principal photography within the prescribed 180- or 240-day commencement period. (II) Notwithstanding subclause (I), a production that has not previously received an allocation under this section or Section 17053.85, 17053.95, or 17053.98, and that completed principal photography of the previous season more than 48 months prior to the application for a credit allocation under this section, shall be deemed not to have commenced principal photography prior to the date on which the application for an allocation of credit under this section is approved by the California Film Commission. (III) Notwithstanding subclauses (I) and (II), a television series that did not commence principal photography prior to July 1, 2025, and applied for but did not receive an allocation under this section for its first season filming in California and makes an application for allocation of credit for its second season filming in California shall be deemed not to have commenced principal photography prior to the date on which the application for an allocation of credit under this section is approved by the California Film Commission. (v) (I) At least 75 percent of production costs for picture editing and postproduction sound labor and services shall be incurred in California. (II) This requirement shall only apply to a qualified motion picture applying for an allocation of credits under this section pursuant to subparagraph (G) of paragraph (8) of subdivision (k) of Section 17053.98 or Section 23698. (vi) Provides a diversity workplan checklist. (C) For the purposes of subparagraph (A), in computing the total wages paid or incurred for the production of a qualified motion picture, all amounts paid or incurred by all persons or entities that share in the costs of the qualified motion picture shall be aggregated. (D) “Qualified motion picture” shall not include commercial advertising, music videos, a motion picture produced for private noncommercial use, such as weddings, graduations, or as part of an educational course and made by students, a news program, current events or public events program, talk show, game show, sporting event or activity, awards show, telethon or other production that solicits funds, reality television program, except as specified in clause (ix) of subparagraph (A), clip-based programming if more than 50 percent of the content is comprised of licensed footage, documentaries, variety programs, daytime dramas, strip shows, or any production that falls within the recordkeeping requirements of Section 2257 of Title 18 of the United States Code. (20) (A) “Qualified taxpayer” means a taxpayer, or a single member limited liability company that is disregarded for tax purposes pursuant to Section 23038, who has paid or incurred qualified expenditures, participated in the Career Readiness requirement in Section 17053.95, and has been issued a credit certificate by the California Film Commission pursuant to subdivision (g). (B) In the case of any pass-thru entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section is not allowed to the pass-thru entity, but shall be passed through to the partners or shareholders in accordance with applicable provisions of Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001). For purposes of this paragraph, “pass-thru entity” means any entity taxed as a partnership or “S” corporation. (21) “Qualified visual effects” means visual effects where at least 75 percent or a minimum of ten million dollars ($10,000,000) of the qualified expenditures for the visual effects are paid or incurred in California. (22) (A) “Qualified wages” means all of the following: (i) Any wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that were paid or incurred by any taxpayer involved in the production of a qualified motion picture with respect to a qualified individual for services performed on the qualified motion picture production within this state. (ii) The portion of any employee fringe benefits paid or incurred by any taxpayer involved in the production of the qualified motion picture that are properly allocable to qualified wage amounts described in clauses (i), (iii), and (iv). (iii) Any payments made to a qualified entity for services performed in this state by qualified individuals within the meaning of paragraph (17). (iv) Remuneration paid to an independent contractor who is a qualified individual for services performed within this state by that qualified individual. (B) “Qualified wages” shall not include any of the following: (i) Expenses, including wages, related to new use, reuse, clip use, licensing, secondary markets, or residual compensation, or the creation of any ancillary product, including, but not limited to, a soundtrack album, toy, game, trailer, or teaser. (ii) Expenses, including wages, paid or incurred with respect to acquisition, development, turnaround, or any rights thereto. (iii) Expenses, including wages, related to financing, overhead, marketing, promotion, or distribution of a qualified motion picture. (iv) Expenses, including wages, paid per person per qualified motion picture for writers, directors, music directors, music composers, music supervisors, producers, and performers, other than background actors with no scripted lines. (23) (A) “Recurring television allocation amount” means the sum of the base year allocation and the product of all of the following: (i) The base year allocation. (ii) The number of subsequent years. (iii) Three percent. (B) For purposes of this paragraph, the following definitions apply: (i) “Base year allocation” means the amount received by the recurring television series in its fiscal year 2025–26 Credit Allocation Letter or Letters, or if no amounts were reserved in fiscal year 2025–26, in the next fiscal year in which a Credit Allocation Letter or Letters were received. (ii) “The number of subsequent years” means the number of full or partial fiscal years that have elapsed since the fiscal year in which the base year allocation was made. (24) “Recurring television series” means any television series that was previously approved and issued a credit allocation letter under this section. (25) “Residual compensation” means supplemental compensation paid at the time that a motion picture is exhibited through new use, reuse, clip use, or in secondary markets, as distinguished from payments made during production. (26) “Reuse” means any use of a qualified motion picture in the same medium for which it was created, following the initial use in that medium. (27) “Secondary markets” means media in which a qualified motion picture is exhibited following the initial media in which it is exhibited. (28) “Television series that relocated to California” means a television series, without regard to episode length or initial media exhibition, with a minimum production budget of one million dollars ($1,000,000) per episode, that filmed at least 75 percent of principal photography days in its most recent season outside of California or has filmed all seasons outside of California and for which the taxpayer certifies that the credit provided pursuant to this section is the primary reason for relocating to California. (c) (1) Notwithstanding any other law, a qualified taxpayer may sell any credit allowed under this section that is attributable to an independent film, as defined in paragraph (7) of subdivision (b), to an unrelated party. (2) The qualified taxpayer shall report to the Franchise Tax Board prior to the sale of the credit, in the form and manner specified by the Franchise Tax Board, all required information regarding the purchase and sale of the credit, including the social security or other taxpayer identification number of the unrelated party to whom the credit has been sold, the face amount of the credit sold, and the amount of consideration received by the qualified taxpayer for the sale of the credit. (3) In the case where the credit allowed under this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding eight taxable years, if necessary, until the credit has been exhausted. (4) A credit shall not be sold pursuant to this subdivision to more than one taxpayer, nor may the credit be resold by the unrelated party to another taxpayer or other party. (5) A party that has acquired tax credits under this subdivision shall be subject to the requirements of this section. (6) In no event may a qualified taxpayer assign or sell any tax credit to the extent the tax credit allowed by this section is claimed on any tax return of the qualified taxpayer. (7) In the event that both the taxpayer originally allocated a credit under this section by the California Film Commission and a taxpayer to whom the credit has been sold both claim the same amount of credit on their tax returns, the Franchise Tax Board may disallow the credit of either taxpayer, so long as the statute of limitations upon assessment remains open. (8) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this subdivision. (9) Subdivision (g) of Section 17039 shall not apply to any credit sold pursuant to this subdivision. (10) For purposes of this subdivision, the unrelated party or parties that purchase a credit pursuant to this subdivision shall be treated as a qualified taxpayer pursuant to paragraph (1) of subdivision (a). (d) (1) No credit shall be allowed pursuant to this section unless the qualified taxpayer provides the following to the California Film Commission: (A) Identification of each qualified individual. (B) The specific start and end dates of production. (C) The total wages paid. (D) The total amount of qualified wages paid to qualified individuals. (E) Aggregate data for individuals whose wages are excluded from qualified wages by clause (iv) of subparagraph (B) of paragraph (22) of subdivision (b), including their gender, ethnic, and racial makeup. (F) The copyright registration number, as reflected on the certificate of registration issued under the authority of Section 410 of Title 17 of the United States Code, relating to registration of claim and issuance of certificate. The registration number shall be provided on the return claiming the credit. (G) The total amounts paid or incurred to purchase or lease tangible personal property used in the production of a qualified motion picture. (H) Information to substantiate its qualified expenditures. (I) Information required by the California Film Commission under regulations promulgated pursuant to subdivision (g) necessary to verify the amount of credit claimed. (J) Data regarding the diversity of the workforce employed by the applicant on the qualified motion picture, as described in subdivision (g). (K) Documentation verifying completion of the Career Readiness requirement. (L) Documentation verifying that the qualified taxpayer paid the Career Pathways Program fee. (2) (A) Based on the information provided in paragraph (1), the California Film Commission shall recompute the jobs ratio previously computed in subdivision (g) and compare this recomputed jobs ratio to the jobs ratio that the qualified taxpayer previously listed on the application submitted pursuant to subdivision (g). (B) (i) If the California Film Commission determines that the jobs ratio has been reduced by more than 10 percent for a qualified motion picture, the California Film Commission shall reduce the amount of credit allowed by an equal percentage, unless the qualified taxpayer demonstrates, and the California Film Commission determines, that reasonable cause exists for the jobs ratio reduction. (ii) If the California Film Commission determines that the jobs ratio has been reduced by more than 20 percent for a qualified motion picture, the California Film Commission shall not accept an application described in subdivision (g) from that qualified taxpayer or any member of the qualified taxpayer’s controlled group for a period of not less than one year from the date of that determination, unless the qualified taxpayer demonstrates, and the California Film Commission determines, that reasonable cause exists for the jobs ratio reduction. (C) For the purposes of this paragraph, “reasonable cause” means unforeseen circumstances beyond the control of the qualified taxpayer, such as, but not limited to, the cancellation of a television series prior to the completion of the scheduled number of episodes or other similar circumstances as determined by the California Film Commission in regulations to be adopted pursuant to subdivision (e). (e) (1) (A) Subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), the California Film Commission shall prescribe rules and regulations to carry out the purposes of this section, including, but not limited to, the following: (i) Subparagraph (D) of paragraph (4) of subdivision (a) and clause (iv) of subparagraph (D) of paragraph (2) of subdivision (g). (ii) Any rules and regulations necessary to establish procedures, processes, requirements, and applications. (iii) (I) Continuing a Career Pathways Program established pursuant to subdivision (e) of Sections 17053.98 and 23698, and pursuant to paragraph (10) of subdivision (g) of this section and Section 23698.1, to fund technical skills training for individuals from underserved communities for entry into film and television jobs. The program shall be funded by a fee equal to 0.5 percent of the approved credit amount for a qualified motion picture. The program shall work with nonprofit organizations that have an established record of training and job placement in the entertainment industry, focus on training individuals from traditionally underserved communities, and offer training courses focused on skilled, technical positions that would be eligible for qualified wages if performed on a qualified motion picture as well as administrative- and industry-related technical occupations or soft skills training for the motion picture industry. (II) Notwithstanding subclause (I), independent films are required to pay a fee equal to 0.25 percent of the approved credit amount for a qualified motion picture. (iv) (I) Beginning January 1, 2028, the California Film Commission, in collaboration with labor and industry stakeholders, has the authority to increase the Career Pathways Training program fee by 0.25 percent per year, up to 1 percent of the approved credit amount for a qualified motion picture, based on evaluation of available information, including, but not limited to, the number of jobs available, job growth in the industry, and information included in the annual reports of the Career Pathways Training program required pursuant to paragraph (11) of subdivision (g). The evaluation shall be included in the annual report to the Legislature. (II) Independent films are not subject to an increase to the fee pursuant to subclause (I). (B) Notwithstanding any other law, prior to preparing a notice of proposed action pursuant to Section 11346.4 of the Government Code and prior to making any revision to the proposed regulation other than a change that is nonsubstantial or solely grammatical in nature, the Governor’s Office of Business and Economic Development shall first approve the proposed regulation or proposed change to a proposed regulation regarding allocating the credit pursuant to subdivision (i), computing the jobs ratio as described in subdivisions (d) and (g), and defining “reasonable cause” pursuant to subparagraph (C) of paragraph (2) of subdivision (d). (2) The California Film Commission shall not be required to prepare an economic impact analysis pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) with regard to any rules and regulations adopted pursuant to this subdivision. (f) If the qualified taxpayer fails to provide the copyright registration number as required in subparagraph (E) of paragraph (1) of subdivision (d), the credit shall be disallowed and assessed and collected under Section 19051 until the procedures are satisfied. (g) For purposes of this section, the California Film Commission shall do all of the following: (1) (A) Subject to the requirements of subparagraphs (A) to (E), inclusive, of paragraph (2), on or after July 1, 2025, and before July 1, 2030, in four or more allocation periods per fiscal year, allocate tax credits to applicants. (B) The California Film Commission shall increase the total credit amount allocated to an applicant by up to 2 percent of the initial credit amount allocated under this section, as determined by the California Film Commission, for qualified productions that employ trainees from a Career Pathways Program pursuant to subparagraph (E) of paragraph (10). (2) (A) Establish a procedure for applicants to file with the California Film Commission a written application, on a form jointly prescribed by the California Film Commission and the Franchise Tax Board for the allocation of the tax credit. The application shall include, but not be limited to, all of the following information: (i) The budget for the motion picture production. (ii) The number of production days. (iii) A financing plan for the production. (iv) The diversity of the workforce employed by the applicant, including, but not limited to, the ethnic and racial makeup of the individuals employed by the applicant during the production of the qualified motion picture, to the extent possible. (v) The amount of qualified wages the applicant expects to pay to qualified individuals. (vi) The amount of tax credit the applicant computes the qualified motion picture will receive, applying the applicable credit percentages described in paragraph (4) of subdivision (a). (vii) A statement establishing that the tax credit described in this section is a significant factor in the applicant’s choice of location for the qualified motion picture. The statement shall include information about whether the qualified motion picture is at risk of not being filmed or specify the jurisdiction or jurisdictions in which the qualified motion picture will be located in the absence of the tax credit. The statement shall be signed by an officer or executive of the applicant. (viii) The applicant’s written policy against unlawful harassment, including, but not limited to, sexual harassment, which includes procedures for reporting and investigating harassment claims, a phone number for an individual who will be responsible for receiving harassment claims, and a statement that the company will not retaliate against an individual who reports harassment. The applicant shall also indicate how the policy will be distributed to employees and include a summary of education training resources, including the prohibition against, and prevention and correction of, sexual harassment and remedies available. (ix) If applicable, summary of the applicant’s voluntary programs to increase the representation of minorities and women in the job classifications that are not included in qualified wages as set forth in clause (iv) of subparagraph (B) of paragraph (22) of subdivision (b) and information about how these programs are publicized to interested parties. The officer or executive referenced in clause (xi) who is signing the statement shall provide additional information about these programs, if needed and upon request, to the California Film Commission. (x) Any other information deemed relevant by the California Film Commission or the Franchise Tax Board. (B) Establish criteria, consistent with the requirements of this section, for allocating tax credits. (C) Determine and designate applicants who meet the requirements of this section. (D) For purposes of allocating the credit amounts subject to the categories described in subdivision (i) in any fiscal year, the California Film Commission shall do all of the following: (i) For each allocation date and for each category, list each applicant from highest to lowest according to the jobs ratio as computed by the California Film Commission. (ii) Subject to the applicable credit percentage, allocate the credit to each applicant according to the highest jobs ratio, working down the list, until the credit amount is exhausted. (iii) (I) Pursuant to regulations adopted pursuant to subdivision (e), the California Film Commission may increase the jobs ratio by up to 25 percent if a qualified motion picture increases economic activity in California according to criteria developed by the California Film Commission that would include, but not be limited to, those factors as, the amount of the production and postproduction spending in California, the employment of scoring musicians in California, and other criteria measuring economic impact in California as determined by the California Film Commission. The criteria developed by the California Film Commission shall not assess fewer points for the employment of scoring musicians in California than any other category within the jobs ratio bonus. (II) For qualified motion pictures that are described in clause (i) of subparagraph (G) of paragraph (8) of subdivision (k) of Section 17053.98 and Section 23698, the jobs ratio shall be equal to the product of the jobs ratio calculated in paragraph (8) of subdivision (b) and 133 percent. (iv) (I) Notwithstanding any other law, any television series, relocating television series, or any new television series based on a pilot for a new television series that has been approved and issued a credit allocation by the California Film Commission under this section, Section 17053.85, 17053.95, 17053.98, 23685, 23695, 23698, or 23698.1 shall be issued a credit for each subsequent season, for the life of that television series whenever credits are allocated within a fiscal year. (II) Notwithstanding subclause (I), a recurring television series that does not request a credit allocation within 18 months from the date of completion of principal photography of the previous season is deemed to have waived the credit allocation guarantee provided by this clause and must reapply for a credit allocation. The California Film Commission may by regulation determine the appropriate priority to be given in a reapplication process for a recurring series reapplying pursuant to this subclause. (III) The California Film Commission shall limit the amount of credits any recurring television series, including a recurring television series under subdivision (k) of Section 17053.98, receives in a subsequent season to no more than the recurring television allocation amount. (IV) In the event that insufficient tax credits are available to fund all recurring television series pursuant to this clause for any fiscal year or in the event the California Film Commission projects, in collaboration with the Department of Finance, that there will be insufficient tax credits available to fund all recurring television series in either of the subsequent two fiscal years, the California Film Commission shall make the following adjustments in the order given until the shortfall, or any projected shortfall for the two subsequent fiscal years, for recurring television series is eliminated: (V) (ia) Notwithstanding clause (iii) of subparagraph (A) of paragraph (2) of subdivision (i), the California Film Commission may redirect up to 100 percent of the credit amounts allocated to the relocating television series category to recurring television series for that fiscal year until the shortfall or projected shortfall is eliminated. (ib) Notwithstanding clause (iv) of subparagraph (A) of paragraph (2) of subdivision (i), the California Film Commission may redirect up to 100 percent of the credit amounts allocated to a new television series to recurring television series for that fiscal year until the shortfall or projected shortfall is eliminated. (ic) Notwithstanding clause (ii) of subparagraph (A) of paragraph (2) of subdivision (i), the California Film Commission may redirect up to 100 percent of the credit allocations from the features category to the recurring television series category for that fiscal year until the shortfall is eliminated. (id) Allocate up to 25 percent of total credit allocations that would otherwise be allocated in the 2029–30 fiscal year to recurring television series in the current fiscal year until the shortfall is eliminated. Any amounts transferred for allocation in the current fiscal year shall be subtracted from the amount allowed to be allocated in the 2029–30 fiscal year as specified in subdivision (i). Notwithstanding paragraph (3), the credit allocations that are subtracted from the 2029–30 fiscal year shall not be certified until July 1, 2030, or later. (ie) The California Film Commission shall consult with the qualified taxpayers who are producing the recurring television series for purposes of negotiating a minimally impactful reduction in the amount of credits awarded to each recurring television series for that fiscal year until the shortfall is eliminated. (E) Subject to the annual cap and the allocation credit amounts based on categories described in subdivision (i), allocate an aggregate amount of credits under this section and Section 23698.1, and allocate any carryover of unallocated or unused credits from prior years and Sections 17053.85, 17053.95, 17053.98, 23685, 23695, and 23698 and the amount of any credits reduced pursuant to paragraph (2) of subdivision (d). (3) Certify tax credits allocated to qualified taxpayers and do all of the following: (A) Establish a verification procedure to do both of the following: (i) Update the information in subparagraph (A) of paragraph (2) of subdivision (g), including, but not limited to, the amounts of qualified expenditures paid or incurred by the applicant. (ii) Ensure that the final safety evaluation report required pursuant to Section 9152 of the Labor Code has been submitted. (B) Establish audit requirements that shall be satisfied before a credit certificate may be issued by the California Film Commission. (C) Issue a credit certificate to a qualified taxpayer upon completion of the qualified motion picture reflecting the credit amount allocated after qualified expenditures have been verified and the jobs ratio computed under this section. The amount of credit shown on the credit certificate shall not exceed the amount of credit allocated to that qualified taxpayer pursuant to this section. (D) (i) Notwithstanding any other law, the California Film Commission shall certify a credit amount equal to 96 percent of the total credit allocated to the qualified taxpayer, unless the qualified taxpayer chooses to submit a diversity workplan and the California Film Commission determines that the qualified taxpayer has met or made a good-faith effort to meet the diversity goals in its diversity workplan, pursuant to clause (ii). (ii) The California Film Commission shall certify an additional credit amount equal to 4 percent of the total credit allocated to the qualified taxpayer if a qualified taxpayer submits to the California Film Commission, in the form and manner required by the commission, all of the following: (I) A diversity workplan within 30 days after receiving a credit allocation letter. The workplan shall be consistent with the diversity workplan checklist to address diversity and be broadly reflective of California’s population in terms of race, ethnicity, gender, disability status, and veteran status, and shall include all of the following: (ia) A statement of the diversity goals the motion picture will seek to achieve in terms of qualified wages. (ib) A statement of the diversity goals the motion picture will seek to achieve for individuals whose wages are excluded from qualified wages. (ic) A plan of what strategies the motion picture will employ to achieve the goals in this subclause and subclause (II). (id) Other requirements as the California Film Commission shall determine by regulation. (II) An interim assessment on the qualified taxpayer’s efforts to meet the diversity workplan prior to the commencement of principal photography. Upon review pursuant to a procedure prescribed in regulations, the California Film Commission shall determine whether the interim assessment indicates that the qualified motion picture is making a good-faith effort to meet the goals of the diversity workplan and shall notify the qualified motion picture of its findings. (III) A final diversity assessment that includes information about how the project met or made a good-faith effort to meet the diversity workplan, including, but not limited to, aggregate data, voluntarily self-reported by individuals whose wages are included in qualified wages and individuals whose wages are excluded from qualified wages, with regard to their race, ethnicity, gender, disability status, veteran status, and ZIP Code. (iii) The California Film Commission, in consultation with the Governor’s Office of Business and Economic Development, shall establish guidelines to evaluate diversity workplans as described in this subparagraph. The guidelines shall be posted on the California Film Commission’s internet website. (iv) The California Film Commission shall approve or reject the diversity workplan of an applicant, to the extent allowed by federal and state law. (v) This subparagraph shall not apply to an independent film with qualified expenditures of ten million dollars ($10,000,000) or less. (vi) The requirements of this subparagraph shall not apply to a recurring television series receiving an allocation of credits under this section pursuant to clause (ii) of subparagraph (G) of paragraph (8) of subdivision (k) of Section 17053.98 or Section 23698 and fulfills the diversity workplan and report requirements pursuant to subdivision (k) of Section 17053.98 or Section 23698. (vii) A qualified motion picture described in subparagraph (D) of paragraph (8) of subdivision (k) of Section 17053.98 or Section 23698 that applies for an allocation of credits under this section shall be subject to the requirements of this subparagraph and not those of clause (iv) of subparagraph (B) of paragraph (2) of subdivision (k) of Sections 17053.98 and 23698 and paragraph (3) of subdivision (k) of Sections 17053.98 and 23698. (4) Obtain, when possible, the following information from applicants that do not receive an allocation of credit: (A) Whether the qualified motion picture that was the subject of the application was completed. (B) If completed, in which state or foreign jurisdiction was the primary principal photography completed. (C) Whether the applicant received any financial incentives from the state or foreign jurisdiction to make the qualified motion picture in that location. (5) Provide the Legislative Analyst’s Office, upon request, any or all application materials or any other materials received from, or submitted by, applicants for which a credit allocation decision has been made, including, but not limited to, applicants that did not receive a credit allocation. Materials provided to the Legislative Analyst’s Office shall be in electronic format when available and include, but not be limited to, information provided pursuant to subclauses (I) to (III), inclusive, of clause (ii) of subparagraph (D) of paragraph (3). (6) The information provided to the California Film Commission pursuant to this section shall constitute confidential tax information for purposes of Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2. (7) (A) Notwithstanding any other law, on or after July 1, 2030, the California Film Commission may allocate, pursuant to this section, any previously allocated credits not certified that have not previously been added to credit amounts available for allocation under this section or a successor section or sections. (B) For purposes of this section, “previously allocated credits not certified” means either of the following: (i) Credits allocated under paragraph (1) for which the qualified taxpayer to which the credit amounts were originally allocated has notified the California Film Commission in writing that the qualified taxpayer will not request certification for the allocated credits. (ii) The difference between the amount of credits allocated under paragraph (1) to a qualified taxpayer and the amount of credits the California Film Commission certified, for that qualified taxpayer. For purposes of calculating the difference, the California Film Commission shall not consider any credit amounts for which the qualified taxpayer notifies the California Film Commission under clause (i). (8) Notwithstanding any other law, on or after July 1, 2030, the California Film Commission may allocate, pursuant to this section, any credit amounts described in subparagraphs (B) and (E) of paragraph (1) of subdivision (i) that have not previously been added to credit amounts available for allocation under this section or a successor section or sections. (9) The California Film Commission shall submit a report to the Legislature, on an annual basis beginning June 30, 2027, containing diversity data provided by the applicants. The report shall contain, in the aggregate and per project, an assessment of whether the diversity workplan goals required by this section were met for qualified motion pictures that submitted the final assessment to the California Film Commission in the prior fiscal year. The assessment shall contain an account of diversity workplans submitted, interim assessments submitted, and final assessments submitted, as well as which categories of the diversity workplan checklist established pursuant to paragraph (5) of subdivision (b) were included. In the event that a report is required pursuant to paragraph (9) of subdivision (g) of Section 17053.98 and Section 23698 in the same year as a report is required under this paragraph, the reports may be combined into one report. The California Film Commission shall submit each such assessment to the Legislature in compliance with Section 9795 of the Government Code. (10) (A) The California Film Commission shall expand the number of nonprofit organizations that partner with the Career Pathways program to build upon their ongoing efforts to provide access to the widest cross section of Californians, including historically disadvantaged and underrepresented individuals seeking training and employment opportunities in motion picture and television production. (B) (i) The California Film Commission shall establish an application process for career-based nonprofit organizations to obtain approval as a Career Pathways Program. (ii) The application shall be submitted to the California Film Commission’s fiscal agent during a request for proposal process initiated by the fiscal agent. (iii) The first request for proposal process shall be initiated by the California Film Commission or its fiscal agent prior to the first allocation of credits allowed under this section. (iv) The second request for proposal process shall be initiated by the California Film Commission or its fiscal agent as needed in response to changes in program revenue or training partners, but no later than July 1, 2027. (v) Subsequent request for proposal processes shall be initiated by the California Film Commission or its fiscal agent as the commission deems necessary. (C) The California Film Commission shall approve Career Pathways programs. Career Pathways programs shall meet all of the following requirements: (i) Be conducted by a nonprofit organization that has an established record of training and job placement in the entertainment industry. (ii) Be focused on training individuals 18 years or older from traditionally underserved communities. (iii) Offer training courses focused on one or more of the following: (I) Skilled, technical positions that would be eligible for qualified wages if performed on a qualified motion picture. (II) Administrative- and industry-related technical occupations. (III) Soft skills training for the motion picture industry. (iv) Meet minimum qualifications and standards for high-quality, skill-based training programs, as determined by the California Film Commission through regulations and in consultation with stakeholders. (D) To ensure the Career Pathways Program is successful and has a meaningful impact, the California Film Commission and its fiscal agent shall, in addition to the requirements specified in subparagraph (C), consider the following aspects when evaluating applications: (i) Availability of participants. (ii) Fiscal agent administrative resources. (iii) Overlap with the focus areas of currently approved organizations, including, but not limited to, industry role focus and student outreach focus. (iv) Specific industry labor needs, as determined by the fiscal agent and based on information provided by industry and labor stakeholders. (E) Before July 1, 2026, the California Film Commission shall develop criteria to incentivize supplemental placement of 1 to 4 trainees from the Career Pathways Program per qualified production. The placement of the trainees shall not displace otherwise anticipated or necessary hiring of experienced employees. Trainee wages shall be excluded from a production’s qualified wages for purposes of the jobs ratio and incentive calculation. (11) Beginning January 1, 2025, the California Film Commission shall collect information to the extent available and based on data provided by the Career Pathways Training program, about the breakdown of spending by the Career Pathways Program, how participation in the Career Pathways Program by both program partners and participants has changed in comparison to prior years, whether graduates of the program are accessing jobs in the film industry upon completion of the program, what projects the students have worked on, whether those projects received a tax credit, whether students are employed in California or another state, and the aggregated self-reported and voluntarily provided ethnic, racial, gender, disability status, veteran status, and ZIP Code of those individuals. The California Film Commission shall report to the Legislature, in compliance with Section 9795 of the Government Code, and publish on its internet website an annual report about the Career Pathways Training program, with the above information. Such information shall be reported for participants for five years following a participant’s completion of the Career Pathways Training program, to the extent the information is available. This paragraph shall be applicable consistent with federal and state law. (h) (1) The California Film Commission shall annually provide the Legislative Analyst’s Office, the Franchise Tax Board, and the California Department of Tax and Fee Administration with a list of qualified taxpayers and the tax credit amounts allocated to each qualified taxpayer by the California Film Commission. The list shall include the names and taxpayer identification numbers, including taxpayer identification numbers of each partner or shareholder, as applicable, of the qualified taxpayer. (2) (A) Notwithstanding paragraph (6) of subdivision (g), the California Film Commission shall annually post on its internet website and make available for public release all of the following: (i) A table which includes all of the following information: a list of qualified taxpayers and the tax credit amounts allocated to each qualified taxpayer by the California Film Commission, the number of production days in California the qualified taxpayer represented in its application would occur, the number of California jobs that the qualified taxpayer represented in its application would be directly created by the production, and the total amount of qualified expenditures expected to be spent by the production. (ii) A narrative staff summary describing the production of the qualified taxpayer as well as background information regarding the qualified taxpayer contained in the qualified taxpayer’s application for the credit. (iii) The diversity report submitted annually to the Legislature described in paragraph (2) of subdivision (g) organized per production and an aggregate compilation describing the voluntary programs collected pursuant to clause (xiii) of subparagraph (A) of paragraph (2) of subdivision (g). (B) Nothing in this subdivision shall be construed to make the information submitted by an applicant for a tax credit under this section a public record, including for the purposes of the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). (3) The California Film Commission shall provide each city and county in California with an instructional guide that includes, but is not limited to, a review of best practices for facilitating motion picture production in local jurisdictions, resources on hosting and encouraging motion picture production, and the California Film Commission’s Model Filming Ordinance. The California Film Commission shall maintain on its internet website a list of initiatives by locality that encourage motion picture production in regions across the state. The list shall be distributed to each approved applicant for the program to highlight local jurisdictions that offer incentives to facilitate film production. (i) (1) (A) The aggregate amount of credits that may be allocated for a fiscal year pursuant to this section and Section 23698.1, except as provided in subdivision (k) of Section 17053.98 and subdivision (k) of Section 23698, is seven hundred fifty million dollars ($750,000,000), plus any amount described in subparagraph (B), (C), (D), or (E) in credits for the 2025–26 fiscal year and each fiscal year thereafter, through and including the 2029–30 fiscal year, except as provided in paragraph (7) of subdivision (g). (B) (i) Subject to clauses (ii) and (iii), the unused allocation credit amount, if any, for the preceding fiscal year. (ii) The amount of unused credit allocation attributable to independent films shall only be allocated according to clause (i) of subparagraph (A) of paragraph (2). (iii) The total amount of any unused credit allocation amount that is remaining shall only be allocated pursuant to clause (iv) of subparagraph (A) of paragraph (2). (C) The amount of previously allocated credits not certified. (D) The amount of any credits reduced pursuant to paragraph (2) of subdivision (d). (E) That portion of any unused allocation credit amount, if any, attributable to Section 17053.85, 17053.95, 17053.98, 23685, 23695, or 23698 available for that fiscal year in a manner as determined by regulations promulgated by the California Film Commission. (2) (A) Notwithstanding the foregoing, and subject to paragraph (4) of this subdivision and changes in allocations pursuant to clause (v) of subparagraph (D) of paragraph (2) of subdivision (g), the California Film Commission shall allocate the credit amounts subject to the following categories, but shall have discretion to reallocate up to 30 percent of the funds within any category amongst the remaining categories to maximize the amount of total credits allocated: (i) Independent films with qualified expenditures of ten million dollars ($10,000,000) or less shall be allocated 5 percent of the amount specified in paragraph (1). Independent films with qualified expenditures in excess of ten million dollars ($10,000,000) shall be allocated 5 percent of the amount specified in paragraph (1). These amounts shall be in addition to any unused allocation credit amount, if any, for the preceding fiscal year as described in subparagraph (B) of paragraph (1). (ii) Features and animated films shall be allocated 35 percent of the amount specified in paragraph (1). (iii) A relocating television series shall be allocated 15 percent of the amount specified in paragraph (1). (iv) A television series described in clause (ii), (v), (vi), or (viii) of subparagraph (A) of paragraph (19) of subdivision (b) and recurring television series shall be allocated 40 percent of the amount specified in paragraph (1), plus any unused allocation credit amount, if any, for the preceding fiscal year as described in subparagraph (B) of paragraph (1). (B) Within any allocation period for credits to a relocating television series, any unused amount shall be reallocated to the category described in clause (iv) of subparagraph (A) and, if any unused amount remains, reallocated in the next allocation period for credits to a relocating television series. (C) With respect to a relocating television series issued a credit in a subsequent year pursuant to clause (v) of subparagraph (D) of paragraph (2) of subdivision (g), that subsequent credit amount shall be allowed from the allocation amount described in clause (iv) of subparagraph (A). (3) Any act that reduces the amount that may be allocated pursuant to paragraph (1) constitutes a change in state taxes for the purpose of increasing revenues within the meaning of Section 3 of Article XIII A of the California Constitution and may be passed by not less than two-thirds of all Members elected to each of the two houses of the Legislature. (4) A qualified motion picture, as defined in subdivision (k) of Sections 17053.98 and 23698, shall not be eligible for an allocation under subdivisions (a) to (j), inclusive, if it receives a credit under subdivision (k) of Section 17053.98 or Section 23698 during that fiscal year. (j) The California Film Commission shall have the authority to allocate tax credits in accordance with this section and in accordance with any regulations prescribed pursuant to subdivision (e) upon adoption. (k) (1) A qualified taxpayer may make a one-time election to be paid a refund for each taxable year of the refundable period, not to exceed the annual refundable amount. (2) For purposes of this subdivision, the following definitions shall apply: (A) “Annual refundable amount” means 20 percent of the total refundable amount. (B) (i) “Credit amount” means the credit amount specified in the credit certificate issued to the qualified taxpayer by the California Film Commission pursuant to subdivision (g). (ii) In the case of a pass-thru entity, the “credit amount” described in paragraphs (2) and (3) means the pro rata share or distributive share of the credit passed through to the partner or shareholder of the qualified taxpayer. For purposes of this subclause, the term “pass-thru entity” means any partnership, “S” corporation, or limited liability company treated as a partnership. (iii) In the case of an assigned credit, the “credit amount” means the credit amount that was assigned to the taxpayer. (C) “Refundable period” means the first taxable year that the credit certificate is issued to the qualified taxpayer by the California Film Commission pursuant to subdivision (g), and the succeeding four taxable years. (D) “Total refundable amount” means 90 percent of the credit amount that exceeds the “net tax” in the first taxable year of the refundable period. (3) The refund shall be computed as follows: (A) (i) In the first taxable year of the refundable period, the credit amount shall be allowed against the “net tax” computed under this part for the taxable year. (ii) If the credit allowed by this section exceeds the “net tax” in the first taxable year of the refundable period, the annual refundable amount shall be refunded to the qualified taxpayer. (B) (i) In each taxable year after the first taxable year of the refundable period, the annual refundable amount shall be allowed as a credit against the “net tax” computed under this part for the taxable year, and the excess, if any, shall be refunded to the qualified taxpayer. (ii) If the qualified taxpayer’s tax liability for the taxable year exceeds the annual refundable amount, only the annual refundable amount shall be allowed as a credit against the qualified taxpayer’s “net tax.” (4) (A) In the first taxable year of the refundable period, the total refundable amount, less the annual refundable amount, shall be carried over to the succeeding taxable year. (B) In each taxable year other than the first taxable year of the refundable period, the total refundable amount, less the annual refundable amount allowed as a credit against the qualified taxpayer’s “net tax” or refunded in the current and prior taxable years in the refundable period, shall be carried over to the next succeeding year of the refundable period. (C) Notwithstanding paragraph (3) of subdivision (c), if an election is made pursuant to this subdivision, no amount of credit shall be allowed after the refundable period. (5) Any refund pursuant to this subdivision shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the qualified taxpayer upon their election. (6) An election made pursuant to this subdivision shall be irrevocable and shall be made on an original, timely filed return required under Part 10.2 (commencing with Section 18401) for the taxable year that the credit certificate is issued in the form and manner as prescribed by the Franchise Tax Board. (7) A taxpayer that purchases a credit pursuant to subdivision (c) cannot elect to be paid a refund pursuant to this subdivision. (l) For the purposes of complying with Section 41 with respect to this section and Section 23698.1 the Legislature finds and declares all of the following: (1) The specific goals, purposes, and objectives that the credits allowed by this section and Section 23698.1 will achieve include all of the following: (A) To maintain and expand motion picture and television productions, and the quality of the jobs they provide, in California. (B) To keep California’s Film Tax Credit competitive with production incentives offered by other states and other countries. (C) To increase the competitiveness of the tax credits allowed by this section and Section 23698.1 relative to previous California motion picture tax credit programs authorized by Sections 17053.85, 17053.95, 17053.98, 23685, 23695, and 23698 by allowing the tax credit to be refundable. (2) The performance indicators for the Legislature to use in determining if the credits accomplish the specific goals, purposes, and objectives may include, but are not limited to, all of the following: (A) The number and types of productions that apply for the tax credits allowed by this section and Section 23698.1. (B) The total amount of credit allocations applied for under this section and Section 23698.1. (C) The total amount of credits allocated under this section and Section 23698.1. (D) The total amount of credits certified as eligible to be claimed on a tax return under this section and Section 23698.1. (E) The number of jobs included in the budgets of productions receiving the tax credits allocated by this section and Section 23698.1. (F) The number of productions relocating from another state or country to California and receive the tax credits allocated by this section and Section 23698.1. (G) A comparison of the performance indicators specified in paragraphs (1) to (6), inclusive, with results from California motion picture tax credit programs authorized by Sections 17053.85, 17053.95, 17053.98, 23685, 23695, and 23698. (H) The total amount of credits allocated by this section and Section 23698.1 that are claimed as a refund on a tax return. (3) On or before May 1, 2028, the Legislative Analyst’s Office shall provide to the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, and the public a report evaluating the effectiveness of the tax credits allowed by this section and Section 23698.1 in achieving the metrics outlined in subdivision (a), including an assessment of the refundability of the tax credit in achieving those metrics. In researching the reports, the Legislative Analyst’s Office may do all of the following: (A) Request and receive all information of California Film Commission applicants for which a credit allocation decision has been made, including, but not limited to, applicants that did not receive a credit allocation, provided to the California Film Commission pursuant to subdivision (g) of this section and Sections 17053.95, 17053.98, 23695, 23698, and 23698.1. (B) Request and receive all information provided to the Franchise Tax Board relating to the sale or assignment of credits pursuant to subdivision (c) of this section and Sections 17053.95, 17053.98, 23695, 23698, and 23698.1. (C) Request and receive all information provided to the California Department of Tax and Fee Administration pursuant to subdivisions (c) and (g) of Section 6902.5. (4) Notwithstanding Section 19542, the California Film Commission, the California Department of Tax and Fee Administration, the Franchise Tax Board, the Employment Development Department, and all other relevant state agencies shall provide additional information, as requested by the Legislative Analyst’s Office, as necessary to research the report required by this subdivision. (5) (A) The information received by the Legislative Analyst’s Office pursuant to this section shall be considered confidential taxpayer information subject to Sections 7056, 7056.5, and 19542 of this code and Section 1094 of the Unemployment Insurance Code, and shall be subject to the appropriate confidentiality requirements of the participating state agency. (B) The Legislative Analyst’s Office may publish statistics in conjunction with the reports required by this section that are derived from information provided to the Legislative Analyst’s Office pursuant to this section, if the published statistics are classified to prevent the identification of particular taxpayers, reports, and tax returns and the publication of the percentage of dividends paid by a corporation that is deductible by the recipient under Part 11 (commencing with Section 23001) of Division 2. (Amended by Stats. 2025, Ch. 27, Sec. 2. (AB 1138) Effective July 3, 2025.)
  2. 17053.99.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A taxpayer seeking certification must tell the California Film Commission that the project meets the listed wage or workforce conditions, and must follow the related contract, payroll, reporting, and compliance rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17053.99. A taxpayer seeking certification of a certified studio construction project by the California Film Commission shall do both of the following: (a) Certify to the California Film Commission that either of the following is true: (1) The entirety of the project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code. (2) The project is not in its entirety a public work for which prevailing wages must be paid under Article 1 (commencing with Section 1720) of Chapter 1 of Part 7 of Division 2 of the Labor Code, but all construction workers employed on the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. If the project is subject to this paragraph, then for those portions of the project that are not a public work all of the following shall apply: (A) The taxpayer shall ensure that the prevailing wage requirement is included in all contracts for the performance of all construction work. (B) All contractors and subcontractors shall pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. (C) Except as provided in subparagraph (E), all contractors and subcontractors performing construction work shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code and make those records available for inspection and copying as provided therein. (D) Except as provided in subparagraph (E), the obligation of the contractors and subcontractors to pay prevailing wages may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, or by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee through a civil action under Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code. (E) Subparagraphs (C) and (D) shall not apply if all contractors and subcontractors performing construction work on the project are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the project and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code. (b) Certify to the California Film Commission that a skilled and trained workforce will be used to perform all construction work on the proposed project. (1) For purposes of this section, “skilled and trained workforce” has the same meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. (2) If the taxpayer has certified that a skilled and trained workforce will be used to construct all work on the project, the following shall apply: (A) The taxpayer shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to construct the project. (B) Every contractor and subcontractor shall use a skilled and trained workforce to construct the project. (C) For purposes of this subdivision, “taxpayer” has the same meaning as “awarding body” as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. (D) Contractors and subcontractors that fail to use a skilled and trained workforce shall be subject to the penalties provided in Section 2603 of the Public Contract Code. Penalties for a contractor’s or subcontractor’s failure to comply with the requirement to use a skilled and trained workforce may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 2603 of the Public Contract Code. Penalties shall be paid to the State Public Works Enforcement Fund. (E) The taxpayer shall provide copies of the monthly reports demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code to the California Film Commission on a monthly basis while the project or contract is being performed. These reports shall be a public record under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and shall be open to public inspection. (F) Subparagraphs (C) to (E), inclusive, shall not apply if all contractors and subcontractors performing work on the project are subject to a project labor agreement that requires compliance with the skilled and trained workforce requirement and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code. (Amended by Stats. 2022, Ch. 28, Sec. 145. (SB 1380) Effective January 1, 2023.)
  3. 17054.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section lets certain individuals deduct personal exemption credits from tax and sets conditions for dependent and blindness credits.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17054. In the case of individuals, the following credits for personal exemption may be deducted from the tax imposed under Section 17041 or 17048, less any increases imposed under paragraph (1) of subdivision (d) or paragraph (1) of subdivision (e), or both, of Section 17560. (a) In the case of a single individual, a head of household, or a spouse making a separate return, a credit of fifty-two dollars ($52). (b) In the case of a surviving spouse (as defined in Section 17046), or spouses making a joint return, a credit of one hundred four dollars ($104). If one spouse was a resident for the entire taxable year and the other spouse was a nonresident for all or any portion of the taxable year, the personal exemption shall be divided equally. (c) In addition to any other credit provided in this section, in the case of an individual who is 65 years of age or over by the end of the taxable year, a credit of fifty-two dollars ($52). (d) (1) A credit of two hundred twenty-seven dollars ($227) for each dependent (as defined in Section 17056) for whom an exemption is allowable under Section 151(c) of the Internal Revenue Code, relating to additional exemption for dependents. The credit allowed under this subdivision for taxable years beginning on or after January 1, 1999, shall not be adjusted pursuant to subdivision (i) for any taxable year beginning before January 1, 2000. (2) (A) (i) For taxable years beginning on or after January 1, 2015, and before January 1, 2018, a credit shall not be allowed under paragraph (1) with respect to any individual unless the identification number, as defined in Section 6109 of the Internal Revenue Code, of that individual is included on the return claiming the credit. (ii) For taxable years beginning on or after January 1, 2018, a credit shall not be allowed under paragraph (1) with respect to any individual unless either of the following occurs: (I) The identifying number, as defined in Section 6109 of the Internal Revenue Code, of that individual is included on the return claiming the credit. (II) In the event an individual who is included on the return claiming the credit is ineligible for an identification number required in subclause (I), the taxpayer shall provide information to identify the individual in the form and the manner as prescribed by the Franchise Tax Board. (B) A disallowance of a credit due to the omission of a correct identification number required under this paragraph, may be assessed by the Franchise Tax Board in the same manner as is provided by Section 19051 in the case of a mathematical error appearing on the return. A claimant shall have the right to claim a credit or refund of adjusted amounts within the period provided in Section 19306, 19307, 19308, or 19311, whichever period expires later. (3) (A) For taxable years beginning on or after January 1, 2009, the credit allowed under paragraph (1) for each dependent shall be equal to the credit allowed under subdivision (a). This subparagraph shall cease to be operative for taxable years beginning on or after January 1, 2011, unless the Director of Finance makes the notification pursuant to Section 99040 of the Government Code, in which case this subparagraph shall cease to be operative for taxable years beginning on or after January 1, 2013. (B) For taxable years that subparagraph (A) ceases to be operative, the credit allowed under paragraph (1) for each dependent shall be equal to the amount that would be allowed if subparagraph (A) had never been operative. (e) A credit for personal exemption of fifty-two dollars ($52) for the taxpayer if the taxpayer is blind at the end of the taxpayer’s taxable year. (f) A credit for personal exemption of fifty-two dollars ($52) for the spouse of the taxpayer if a separate return is made by the taxpayer, and if the spouse is blind and, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer. (g) For the purposes of this section, an individual is blind only if either (1) the individual’s central visual acuity does not exceed 20/200 in the better eye with correcting lenses, or (2) the individual’s visual acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees. (h) In the case of an individual with respect to whom a credit under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, the credit amount applicable to that individual for that individual’s taxable year is zero. (i) For each taxable year beginning on or after January 1, 1989, the Franchise Tax Board shall compute the credits prescribed in this section. That computation shall be made as follows: (1) The Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year. (2) The Franchise Tax Board shall add 100 percent to the percentage change figure which is furnished to them pursuant to paragraph (1), and divide the result by 100. (3) The Franchise Tax Board shall multiply the immediately preceding taxable year credits by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1). (4) In computing the credits pursuant to this subdivision, the credit provided in subdivision (b) shall be twice the credit provided in subdivision (a). (Amended by Stats. 2020, Ch. 99, Sec. 1. (AB 2247) Effective January 1, 2021.)
  4. 17054.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    If a taxpayer’s federal adjusted gross income is above the threshold amount, certain credits are reduced by $6 for each $2,500 (or part) above the threshold, with specific threshold amounts and exceptions for some filing statuses.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17054.1. (a) (1) In the case of any taxpayer whose federal adjusted gross income for the taxable year exceeds the threshold amount, each credit to which this section applies shall be reduced by six dollars ($6) for each two thousand five hundred dollars ($2,500), or fraction thereof, by which the taxpayer’s federal adjusted gross income exceeds the threshold amount. (2) In the case of credit allowed by subdivision (b) of Section 17054 (relating to joint returns and surviving spouses), the “six dollars ($6)” referred to in paragraph (1) shall be applied by substituting “twelve dollars ($12).” (3) In the case of a married individual filing a separate return, the “two thousand five hundred dollars ($2,500)” referred to in paragraph (1) shall be applied by substituting “one thousand two hundred fifty dollars ($1,250).” (4) Under no circumstances shall any credit reduced by paragraph (1) be reduced below zero. (b) For purposes of this section, “threshold amount” means the following: (1) Two hundred thousand dollars ($200,000) in the case of a joint return or a surviving spouse, as defined by Section 17046. (2) One hundred fifty thousand dollars ($150,000) in the case of a head of a household, as defined by Section 17042. (3) One hundred thousand dollars ($100,000) in the case of an individual who is not married and who is not a surviving spouse or head of a household. (4) One hundred thousand dollars ($100,000) in the case of a married individual filing a separate return. (c) This section shall apply to the following credits: (1) Each of the credits allowed by Section 17054. (2) The credit allowed by Section 17054.6. (d) In the case of a taxpayer filing a nonresident or part-year resident return, the reduction of exemption credits, as provided by this section, shall be applicable prior to proration of those credits as provided by Section 17055. (e) For purposes of this section, marital status shall be determined under Section 17021.5. (f) For taxable years beginning on or after January 1, 1992, the threshold amounts specified in subdivision (b) shall be recomputed annually in the same manner as the recomputation of income tax brackets under subdivision (h) of Section 17041. (g) This section shall apply to taxable years beginning on or after January 1, 1991. (Amended by Stats. 1991, Ch. 474, Sec. 7. Effective October 2, 1991.)
  5. 17054.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section allows a tax credit for a qualified individual and caps it at $200 per taxable year.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17054.5. (a) (1) There shall be allowed as a credit against the “net tax” (as defined in Section 17039) of a qualified individual an amount equal to 30 percent of the net tax. (2) For taxable years beginning on or after January 1, 1987, and before January 1, 1988, a qualified individual means a qualified joint custody head of household as defined in subdivision (c). (3) For taxable years beginning on or after January 1, 1988, a qualified individual means either of the following: (A) A “qualified joint custody head of household” as defined in subdivision (c). (B) A “qualified taxpayer” as defined in subdivision (e). (4) The amount of the credit under this section shall not exceed two hundred dollars ($200) for any taxable year. (b) For each taxable year beginning on or after January 1, 1988, the Franchise Tax Board shall recompute the maximum credit prescribed in subdivision (a). That computation shall be made as follows: (1) The California Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index as modified for rental equivalent homeownership for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year. (2) The Franchise Tax Board shall add 100 percent to the percentage change figure which is furnished to them pursuant to paragraph (1) and divide the result by 100. (3) The Franchise Tax Board shall multiply the immediately preceding taxable year credit by the inflation adjustment factor determined in paragraph (2), and round off the resulting product to the nearest one dollar ($1). (c) “Qualified joint custody head of household” means an individual who meets all of the following: (1) Is not married at the close of the taxable year, or files a separate return and does not have his or her spouse as a member of his or her household during the entire taxable year. (2) Maintains as his or her home a household which constitutes for the taxable year the principal place of abode for a qualifying child, as defined in subdivision (d), for no less than 146 days of the taxable year but no more than 219 days of the taxable year, under a decree of dissolution or separate maintenance, or under a written agreement between the parents prior to the issuance of a decree of dissolution or separate maintenance where the proceedings have been initiated. (3) Furnishes over one-half the cost of maintaining the household during the taxable year. (4) Does not qualify as a head of household under Section 17042 or as a surviving spouse under Section 17046. (d) For purposes of this section, a “qualifying child” means a son, stepson, daughter, or stepdaughter of the taxpayer or a descendant of a son or daughter of the taxpayer, but if that son, stepson, daughter, stepdaughter, or descendant is married at the close of the taxpayer’s taxable year, only if the taxpayer is entitled to a credit for the taxable year for that person under Section 17054. (e) “Qualified taxpayer” means an individual who meets all of the following: (1) Is married and files a separate return. (2) During the last six months of the taxable year the taxpayer’s spouse was not a member of the taxpayer’s household. (3) Maintains a household, whether or not the taxpayer’s home, which constitutes the principal place of abode of a dependent mother or father of the taxpayer for the taxable year. (4) Furnishes over one-half of the cost of maintaining the household during the taxable year. (5) Does not qualify as a head of household under Section 17042 or as a surviving spouse under Section 17046. (Amended by Stats. 1999, Ch. 987, Sec. 6.5. Effective October 10, 1999.)
  6. 17054.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A qualified senior head of household may claim a credit equal to 2% of taxable income, and the Franchise Tax Board must adjust the income limit using CPI-based calculations.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17054.7. (a) There shall be allowed as a credit against the “net tax” (as defined in Section 17039) for a “qualified senior head of household” (as defined in subdivision (c)) an amount equal to 2 percent of the taxable income. (b) For each taxable year beginning on or after January 1, 1991, the Franchise Tax Board shall recompute the adjusted gross income specified in paragraph (3) of subdivision (c). Those computations shall be made as follows: (1) The California Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index as modified for rental equivalent home ownership for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year. (2) The Franchise Tax Board shall add 100 percent to the percentage change figure which is furnished pursuant to paragraph (1) and divide the result by 100. (3) The Franchise Tax Board shall multiply the amount for the immediately preceding taxable year for the adjusted gross income limitation specified in paragraph (3) of subdivision (c) by the inflation adjustment factor determined in paragraph (2), and round off the resulting product to the nearest one dollar ($1). (c) “Qualified senior head of household” means an individual who meets all of the following: (1) Attained the age of 65 before the close of the taxable year. (2) Qualified as the head of household in accordance with Section 17042 for either of the two taxable years immediately preceding the taxable year by providing a household for a qualifying individual who died during either of the two taxable years immediately preceding the taxable year. (3) Whose adjusted gross income for the taxable year does not exceed thirty-seven thousand five hundred dollars ($37,500). (Amended by Stats. 1993, Ch. 877, Sec. 12. Effective October 6, 1993.)
  7. 17055.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    Nonresident and part-year resident individuals may claim credits under this part against net tax, but only in the proportions and exceptions stated here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17055. (a) An individual who is a nonresident or a part-year resident shall be allowed all credits provided under this part against the “net tax,” as defined by Section 17039, except those described in subdivision (b) and in Section 17053.5, relating to the renter’s credit, and Section 18002, relating to taxes paid to another state, in the same proportion as the ratio that “taxable income of a nonresident or part-year resident” computed under paragraph (1) of subdivision (i) of Section 17041 bears to “total taxable income,” as defined in Section 17301.5. (b) Credits allowed under this part that are conditional upon a transaction occurring wholly within California and the credit allowed under Section 17052.10 or 17052.11 shall be allowed in their entirety. (Amended by Stats. 2025, Ch. 17, Sec. 11. (SB 132) Effective June 27, 2025.)
  8. 17056.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    For this part, “dependents” means the same as in Section 152 of the Internal Revenue Code.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17056. For the purposes of this part, the term “dependents” has the same meaning as that term is defined by Section 152 of the Internal Revenue Code. (Amended by Stats. 1983, Ch. 488, Sec. 15. Effective July 28, 1983.)
  9. 17057.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    The Legislature states that the state low-income housing tax credit for a project must not exceed the extra amount needed, beyond the federal tax credit, to make the project financially feasible and viable through the extended use period.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17057.5. It is the intent of the Legislature that the amount of the state low-income housing tax credit allocated to a project pursuant to Section 17058 shall not exceed an amount in addition to the federal tax credit that is necessary for the financial feasibility of the project and its viability throughout the extended use period. (Amended (as added by Stats. 1990, Ch. 166) by Stats. 1990, Ch. 1349, Sec. 6.1. Effective September 26, 1990.)
  10. 17058.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section allows a state low-income housing tax credit, and sets out who may claim it, how the credit is certified and allocated, and when it may be sold or carried over.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17058. (a) (1) There shall be allowed as a credit against the “net tax,” defined in Section 17039, a state low-income housing tax credit in an amount equal to the amount determined in subdivision (c), computed in accordance with Section 42 of the Internal Revenue Code, relating to low-income housing credit, except as otherwise provided in this section. (2) “Taxpayer,” for purposes of this section, means the sole owner in the case of an individual, the partners in the case of a partnership, and the shareholders in the case of an “S” corporation. (3) “Housing sponsor,” for purposes of this section, means the sole owner in the case of an individual, the partnership in the case of a partnership, and the “S” corporation in the case of an “S” corporation. (b) (1) The amount of the credit allocated to any housing sponsor shall be authorized by the California Tax Credit Allocation Committee, or any successor thereof, based on a project’s need for the credit for economic feasibility in accordance with the requirements of this section. (A) The low-income housing project shall be located in California and shall meet either of the following requirements: (i) Except for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, that are allocated credits solely under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code, the project’s housing sponsor has been allocated by the California Tax Credit Allocation Committee a credit for federal income tax purposes under Section 42 of the Internal Revenue Code, relating to low-income housing credit. (ii) It qualifies for a credit under Section 42(h)(4)(B) of the Internal Revenue Code, relating to special rule where 50 percent or more of building is financed with tax-exempt bonds subject to volume cap. (B) The California Tax Credit Allocation Committee shall not require fees for the credit under this section in addition to those fees required for applications for the tax credit pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit. The committee may require a fee if the application for the credit under this section is submitted in a calendar year after the year the application is submitted for the federal tax credit. (C) (i) For a project that receives a preliminary reservation of the state low-income housing tax credit, allowed pursuant to subdivision (a), on or after January 1, 2009, the credit shall be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, regardless of how the federal low-income housing tax credit with respect to the project is allocated to the partners, or whether the allocation of the credit under the terms of the agreement has substantial economic effect, within the meaning of Section 704(b) of the Internal Revenue Code, relating to determination of distributive share. (ii) To the extent the allocation of the credit to a partner under this section lacks substantial economic effect, any loss or deduction otherwise allowable under this part that is attributable to the sale or other disposition of that partner’s partnership interest made prior to the expiration of the federal credit shall not be allowed in the taxable year in which the sale or other disposition occurs, but shall instead be deferred until and treated as if it occurred in the first taxable year immediately following the taxable year in which the federal credit period expires for the project described in clause (i). (iii) This subparagraph shall not apply to a project that receives a preliminary reservation of state low-income housing tax credits under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code unless the project also receives a preliminary reservation of federal low-income housing tax credits. (2) (A) The California Tax Credit Allocation Committee shall certify to the housing sponsor the amount of tax credit under this section allocated to the housing sponsor for each credit period. (B) In the case of a partnership or an “S” corporation, the housing sponsor shall provide a copy of the California Tax Credit Allocation Committee certification to the taxpayer. (C) (i) A taxpayer shall be eligible to claim the credit commencing in the taxable year the building is placed in service and the federal credit period commences, notwithstanding that the certification pursuant to subparagraph (A) has not been issued by the California Tax Credit Allocation Committee, provided that the housing sponsor has filed a taxpayer certification with the California Tax Credit Allocation Committee and delivered a copy to the taxpayer. The amount of credit claimed by the taxpayer shall not exceed the pro rata share with respect to the amount of credit that the taxpayer purchased or is allocated per the partnership agreement, as applicable, of the lesser of either of the following: (I) The applicable percentages for each of the four credit years, as specified in subdivision (c), multiplied by the qualified basis of the building set forth in the preliminary reservation. (II) The amount of credit the project is eligible for as stated in the taxpayer certification. (ii) The California Tax Credit Allocation Committee may, but is not required to, review the taxpayer certification and other information provided by the housing sponsor to confirm both of the following: (I) The calculations set forth in the taxpayer certification. (II) The amount of credits allocated to the project is consistent with applicable California Tax Credit Allocation Committee rules and regulations for the purposes of making the certification required pursuant to subparagraph (A). (iii) If the California Tax Credit Allocation Committee issues a certification pursuant to subparagraph (A) that is inconsistent with the taxpayer certification upon which a credit has been claimed, the taxpayer shall amend any previously filed tax returns to reflect the credit amount certified by the California Tax Credit Allocation Committee pursuant to subparagraph (A). (iv) For purposes of this subparagraph, “taxpayer certification” means a certified statement from the certified public accountant of the housing sponsor. The taxpayer certification shall contain the amount of the credit the project is eligible for, the taxable year the building is placed in service, and the taxable year in which the federal credit period for the building has commenced. (v) The taxpayer shall, upon request, provide a copy of the taxpayer certification pursuant to clause (iv) or the California Tax Credit Allocation Committee’s certification pursuant to subparagraph (A), as applicable, to the Franchise Tax Board. (vi) In the case of a failure to provide a copy of the taxpayer certification pursuant to clause (iv) or the California Tax Credit Allocation Committee’s certification pursuant to subparagraph (A), if the Franchise Tax Board so requires, no credit under this section shall be allowed for that taxable year until a copy of that certification is provided. (vii) The changes made to this subparagraph by the act adding this clause shall apply for taxable years beginning on or after January 1, 2023. (D) All elections made by the taxpayer pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit, apply to this section. (E) (i) Except as described in clause (ii) or (iii), for buildings located in designated difficult development areas (DDAs) or qualified census tracts (QCTs), as defined in Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, credits may be allocated under this section in the amounts prescribed in subdivision (c), provided that the amount of credit allocated under Section 42 of the Internal Revenue Code, relating to low-income housing credit, is computed on 100 percent of the qualified basis of the building. (ii) Notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit for buildings located in DDAs or QCTs that are restricted to having 50 percent of the building’s occupants be special needs households, as defined in the California Code of Regulations by the California Tax Credit Allocation Committee, or receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), even if the taxpayer receives federal credits pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, provided that the credit allowed under this section shall not exceed 30 percent of the eligible basis of the building. (iii) On and after January 1, 2018, notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit pursuant to paragraph (7) of subdivision (c) even if the taxpayer receives federal credits, pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas. (F) (i) The California Tax Credit Allocation Committee may allocate a credit under this section in exchange for a credit allocated pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, in amounts up to 30 percent of the eligible basis of a building if the credits allowed under Section 42 of the Internal Revenue Code, relating to low-income housing credit, are reduced by an equivalent amount. (ii) An equivalent amount shall be determined by the California Tax Credit Allocation Committee based upon the relative amount required to produce an equivalent state tax credit to the taxpayer. (c) Section 42(b) of the Internal Revenue Code, relating to applicable percentage: 70 percent present value credit for certain new buildings; 30 percent present value credit for certain other buildings, shall be modified as follows: (1) In the case of any qualified low-income building placed in service by the housing sponsor during 1987, the term “applicable percentage” means 9 percent for each of the first three years and 3 percent for the fourth year for new buildings (whether or not the building is federally subsidized) and for existing buildings. (2) In the case of any qualified low-income building that receives an allocation after 1989 and is a new building not federally subsidized, the term “applicable percentage” means the following: (A) For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are not federally subsidized for the taxable year, determined in accordance with the requirements of Section 42(b)(2) of the Internal Revenue Code, relating to temporary minimum credit rate for nonfederally subsidized new buildings, in lieu of the percentage prescribed in Section 42(b)(1)(A) of the Internal Revenue Code. (B) For the fourth year, the difference between 30 percent and the sum of the applicable percentages for the first three years. (3) In the case of any qualified low-income building that is a new building that is federally subsidized and receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), the term “applicable percentage” means for the first three years, 9 percent of the qualified basis of the building, and for the fourth year, 3 percent of the qualified basis of the building. (4) In the case of any qualified low-income building that receives an allocation after 1989 pursuant to subparagraph (A) of paragraph (1) of subdivision (g) and that is a new building that is federally subsidized or that is an existing building that is “at risk of conversion,” the term “applicable percentage” means the following: (A) For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are federally subsidized for the taxable year. (B) For the fourth year, the difference between 13 percent and the sum of the applicable percentages for the first three years. (5) In the case of any qualified low-income building that meets all of the requirements of subparagraphs (A) through (D), inclusive, the term “applicable percentage” means 30 percent for each of the first three years and 5 percent for the fourth year. A qualified low-income building receiving an allocation under this paragraph is ineligible to also receive an allocation under paragraph (3). (A) The qualified low-income building is at least 15 years old. (B) The qualified low-income building is either: (i) Serving households of very low income or extremely low income such that the average maximum household income as restricted, pursuant to an existing regulatory agreement with a federal, state, county, local, or other governmental agency, is not more than 45 percent of the area median gross income, as determined under Section 42 of the Internal Revenue Code, relating to low-income housing credit, adjusted by household size, and a tax credit regulatory agreement is entered into for a period of not less than 55 years restricting the average targeted household income to no more than 45 percent of the area median income. (ii) Financed under Section 514 or 521 of the National Housing Act of 1949 (42 U.S.C. Sec. 1485). (C) The qualified low-income building would have insufficient credits under paragraphs (2) and (3) to complete substantial rehabilitation due to a low appraised value. (D) The qualified low-income building will complete the substantial rehabilitation in connection with the credit allocation herein. (6) For purposes of this section, the term “at risk of conversion,” with respect to an existing property, means a property that satisfies all of the following criteria: (A) The property is a multifamily rental housing development in which at least 50 percent of the units receive governmental assistance pursuant to any of the following: (i) New construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, or any other program providing project-based assistance pursuant to Section 8 of the United States Housing Act of 1937, Section 1437f of Title 42 of the United States Code, as amended. (ii) The Below-Market-Interest-Rate Program pursuant to Section 221(d)(3) of the National Housing Act, Sections 1715l(d)(3) and (5) of Title 12 of the United States Code. (iii) Section 236 of the National Housing Act, Section 1715z-1 of Title 12 of the United States Code. (iv) Programs for rent supplement assistance pursuant to Section 101 of the Housing and Urban Development Act of 1965, Section 1701s of Title 12 of the United States Code, as amended. (v) Programs under Sections 514, 515, 516, 533, and 538 of the Housing Act of 1949 (Public Law 81-171), as amended. (vi) The low-income housing credit program set forth in Section 42 of the Internal Revenue Code, relating to low-income housing credit, this section, and Sections 12206 and 23610.5. (vii) Programs for loans or grants administered by the Department of Housing and Community Development. (viii) Section 202 of the Housing Act of 1959 (12 U.S.C. Sec. 1701q), as amended. (ix) Section 142(d) of the Internal Revenue Code or its predecessors. (x) Section 147 of the Internal Revenue Code, as enacted by the Tax Reform Act of 1986 (Public Law 99-514), or as subsequently amended, including as amended by the Tax Cuts and Jobs Act of 2017 (Public Law 115-97) and all amendments enacted prior to the Tax Cuts and Jobs Act of 2017 (Public Law 115-97). (xi) Title I of the Housing and Community Development Act of 1974, as amended. (xii) Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990, as amended. (xiii) Titles IV and V of the McKinney-Vento Homeless Assistance Act of 1987, as amended, including the Department of Housing and Urban Development’s Supportive Housing Program, Shelter Plus Care Program, and surplus federal property disposition program. (xiv) The following assistance provided by counties and cities in exchange for restrictions on the maximum rents that may be charged for units within a multifamily rental housing development and on the maximum tenant income as a condition of eligibility for occupancy of the unit subject to the rent restriction, as reflected by a recorded agreement with a county or city: (I) Loans or grants provided using tax increment financing pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the Health and Safety Code). (II) Local housing trust funds, as referred to in Section 50843 of the Health and Safety Code. (III) The sale or lease of public property at or below market rates. (IV) The granting of density bonuses, or concessions or incentives, including fee waivers, parking variances, or amendments to general plans, zoning, or redevelopment project area plans, pursuant to Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code. (B) As used in subparagraph (A), “government assistance” shall not include the use of tenant-based housing choice vouchers under subsection (o) of Section 1437f of Title 42 of the United States Code, excluding paragraph (13) relating to project-based assistance. Restrictions shall not include any rent control or rent stabilization ordinance imposed by a county or city. (C) If the development is subject to restrictions on rent and income levels, 50 percent of the units are also restricted to initial occupancy by lower income households, as defined in Section 50079.5 of the Health and Safety Code. (D) The restrictions on rent and income levels, excluding any restrictions recorded pursuant to paragraph (2) of subdivision (e) of Section 65863.11 or Section 65863.13 of the Government Code or in connection with interim or acquisition financing, will terminate or the federally insured mortgage or rent subsidy contract on the property is eligible for prepayment or termination any time within five years before or after the date of application to the California Tax Credit Allocation Committee. (E) The entity acquiring the property enters into a regulatory agreement that requires the property to be operated in accordance with the requirements of Section 42 of the Internal Revenue Code and any further requirements added by the California Tax Credit Allocation Committee to implement the low-income housing tax credit established by Section 42 of the Internal Revenue Code (26 U.S.C. Sec. 42), this section, and Sections 12206 and 23610.5 pursuant to Chapter 3.6 (commencing with Section 50199.4) of Part 1 of Division 31 of the Health and Safety Code. (F) The property satisfies the requirements of Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not apply. (7) On and after January 1, 2018, in the case of any qualified low-income building that is (A) farmworker housing, as defined by paragraph (2) of subdivision (h) of Section 50199.7 of the Health and Safety Code, and (B) is federally subsidized, the term “applicable percentage” means for each of the first three years, 20 percent of the qualified basis of the building, and for the fourth year, 15 percent of the qualified basis of the building. (d) The term “qualified low-income housing project” as defined in Section 42(c)(2) of the Internal Revenue Code, relating to qualified low-income building, is modified by adding the following requirements: (1) The taxpayer shall be entitled to receive a cash distribution from the operations of the project, after funding required reserves, that, at the election of the taxpayer, is equal to: (A) An amount not to exceed 8 percent of the lesser of: (i) The owner equity, which shall include the amount of the capital contributions actually paid to the housing sponsor and shall not include any amounts until they are paid on an investor note. (ii) Twenty percent of the adjusted basis of the building as of the close of the first taxable year of the credit period. (B) The amount of the cashflow from those units in the building that are not low-income units. For purposes of computing cashflow under this subparagraph, operating costs shall be allocated to the low-income units using the “floor space fraction,” as defined in Section 42 of the Internal Revenue Code, relating to low-income housing credit. (C) Any amount allowed to be distributed under subparagraph (A) that is not available for distribution during the first 5 years of the compliance period may be accumulated and distributed any time during the first 15 years of the compliance period but not thereafter. (2) The limitation on return shall apply in the aggregate to the partners if the housing sponsor is a partnership and in the aggregate to the shareholders if the housing sponsor is an “S” corporation. (3) The housing sponsor shall apply any cash available for distribution in excess of the amount eligible to be distributed under paragraph (1) to reduce the rent on rent-restricted units or to increase the number of rent-restricted units subject to the tests of Section 42(g)(1) of the Internal Revenue Code, relating to in general. (e) The provisions of Section 42(f) of the Internal Revenue Code, relating to definition and special rules relating to credit period, shall be modified as follows: (1) The term “credit period” as defined in Section 42(f)(1) of the Internal Revenue Code, relating to credit period defined, is modified by substituting “four taxable years” for “10 taxable years.” (2) The special rule for the first taxable year of the credit period under Section 42(f)(2) of the Internal Revenue Code, relating to special rules for 1st year of credit period, shall not apply to the tax credit under this section. (3) Section 42(f)(3) of the Internal Revenue Code, relating to determination of applicable percentage with respect to increases in qualified basis after 1st year of credit period, is modified to read: If, as of the close of any taxable year in the compliance period, after the first year of the credit period, the qualified basis of any building exceeds the qualified basis of that building as of the close of the first year of the credit period, the housing sponsor, to the extent of its tax credit allocation, shall be eligible for a credit on the excess in an amount equal to the applicable percentage determined pursuant to subdivision (c) for the four-year period beginning with the taxable year in which the increase in qualified basis occurs. (f) The provisions of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, shall be modified as follows: (1) Section 42(h)(2) of the Internal Revenue Code, relating to allocated credit amount to apply to all taxable years ending during or after credit allocation year, does not apply and instead the following provisions apply: The total amount for the four-year credit period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the California Tax Credit Allocation Committee for the calendar year in which the allocation is made. (2) Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I), (7), and (8) of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, do not apply to this section. (g) The aggregate housing credit dollar amount that may be allocated annually by the California Tax Credit Allocation Committee pursuant to this section, Section 12206, and Section 23610.5 shall be an amount equal to the sum of all the following: (1) (A) Seventy million dollars ($70,000,000) for the 2001 calendar year, and, for the 2002 calendar year and each calendar year thereafter, seventy million dollars ($70,000,000) increased by the percentage, if any, by which the Consumer Price Index for the preceding calendar year exceeds the Consumer Price Index for the 2001 calendar year. For the purposes of this paragraph, the term “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the federal Department of Labor. (B) Five hundred million dollars ($500,000,000) for the 2020 calendar year, and up to five hundred million dollars ($500,000,000) for the 2021 calendar year and every year thereafter. Allocations shall only be available pursuant to this subparagraph in the 2021 calendar year and thereafter if the annual Budget Act, or if any bill providing for appropriations related to the Budget Act, specifies an amount to be available for allocation in that calendar year by the California Tax Credit Allocation Committee, and after the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee have adopted regulations, rules, or guidelines to align the programs of both committees with the objective of increasing production and containing costs as described in clause (iii). The California Tax Credit Allocation Committee shall accept applications for the 2021 calendar year not sooner than 30 days after these regulations, rules, or guidelines have been adopted. The California Debt Limit Allocation Committee shall not accept applications for the 2021 calendar year for bond allocations for an eligible project under this section prior to issuing, reviewing, and publishing a new tax-exempt private activity bond demand survey. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall not be eligible for receipt of the housing credit allocated from the increased amount under this subparagraph. Except as provided in clause (vi), a housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall remain eligible for receipt of the housing credit allocated from the credit ceiling amount under subparagraph (A). (i) Eligible projects for allocations under this subparagraph include any new building, as defined in Section 42(i)(4) of the Internal Revenue Code, relating to newly constructed buildings, and the regulations promulgated thereunder, excluding rehabilitation expenditures under Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, and is federally subsidized. Eligible projects for allocations under this subparagraph also include any retrofitting and repurposing of existing nonresidential structures, including, but not limited to, hotels and motels, that were converted to residential use within the previous five years from the date of the application. (ii) Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2020 calendar year, the California Tax Credit Allocation Committee shall consider projects located throughout the state and shall allocate housing credits, subject to the minimum federal requirements as set forth in Sections 42 and 142 of the Internal Revenue Code, the minimum requirements set forth in Sections 5033 and 5190 of the California Debt Limit Allocation Committee regulations, and the minimum set forth in Section 10326 of the Tax Credit Allocation Committee regulations, for projects that can begin construction within 180 days from award, subject to availability of funds. (iii) (I) Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2021 calendar year and thereafter, the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee shall develop and prescribe regulations, rules, or guidelines necessary to implement a new allocation methodology that is aimed at increasing production and containing costs, which would include a scoring system that maximizes the efficient use of public subsidy and benefit created through the private activity bond and low-income housing tax credit programs. The factors for determining the efficient use of public subsidy and benefit shall include, but not be limited to, all of the following: (ia) The number and size of units developed including local incentives provided to increase density. (ib) The proximity to amenities, jobs, and public transportation. (ic) The location of the development. (id) The delivery of housing affordable to very low and extremely low income households by the development. (II) The efficient use of public subsidy and benefit criteria specified in this clause shall take into account the total state subsidy provided and prioritize cost containment and increased unit production. These regulations, rules, or guidelines developed pursuant to this subparagraph shall also consider updated definitions for at-risk preservation and new construction. (III) For bond allocations for the 2021 calendar year to projects eligible for an allocation under this subparagraph, the California Debt Limit Allocation Committee may adopt emergency regulations. (IV) The California Tax Credit Allocation Committee shall consider amending the regulations establishing a scoring system, as required by this clause, to also grant, for farmworker housing as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, maximum points to farmworker housing projects under the housing needs category, and an initial five points in the category for site amenities beyond those required as additional thresholds. (iv) Of the amount available pursuant to this subparagraph, and notwithstanding any other requirement of this section, the California Tax Credit Allocation Committee may allocate up to two hundred million dollars ($200,000,000) for housing financed by the California Housing Finance Agency under its Mixed-Income Program. (v) (I) For the calendar years of 2024 to 2034, inclusive, of the amount available pursuant to this subparagraph, the lesser of 5 percent of that amount or twenty-five million dollars ($25,000,000) per calendar year shall be set aside for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, and administered consistent with the credits available pursuant to paragraph (4). (II) Any credits pursuant to this clause that remain unallocated following the conclusion of a funding round shall roll over to consecutive subsequent funding rounds in that calendar year with the exception that any credits that remain unallocated after the final funding round in that calendar year shall be added back to the aggregate amount of credits that may be allocated pursuant to this subparagraph. (III) For the 2035 calendar year, and every year thereafter, of the amount available pursuant to this subparagraph, a portion of the amount allocated shall be set aside for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code. The amount set aside shall be determined by the Legislature upon consideration of the comprehensive strategy, or most recent update thereof, provided by the Department of Housing and Community Development pursuant to subdivision (c) of Section 50408.5 of the Health and Safety Code. (vi) (I) For any calendar year in which the California Debt Limit Allocation Committee has declared a competition for the award of tax-exempt bond authority for qualified residential rental projects, the California Tax Credit Allocation Committee may allocate some or all of the credits allocated under this subparagraph, except for any credits allocated for housing financed by the California Housing Finance Agency under its Mixed-Income Program, for nonfederally subsidized buildings eligible for credits under Section 42 of the Internal Revenue Code, relating to low-income housing credit, and shall allocate the remainder of these credits for new buildings, as defined in Section 42(i)(4) of the Internal Revenue Code, relating to new buildings, that are federally subsidized and that can begin construction within a reasonable time, as determined by the California Tax Credit Allocation Committee. (II) For any calendar year in which the California Debt Limit Allocation Committee has not declared a competition for the award of tax-exempt bond authority for qualified residential rental projects, projects receiving an award of credits pursuant to this subparagraph shall begin construction within a reasonable time, as determined by the California Tax Credit Allocation Committee. (III) Notwithstanding subclauses (I) and (II), if credits available under this subparagraph remain unallocated after the final California Debt Limit Allocation Committee round for qualified residential rental projects in a given calendar year, the California Tax Credit Allocation Committee may allocate some or all of the remaining credits for nonfederally subsidized buildings eligible for credits under Section 42 of the Internal Revenue Code, relating to low-income housing credit. (2) The unused housing credit ceiling, if any, for the preceding calendar years. (3) The amount of housing credit ceiling returned in the calendar year. For purposes of this paragraph, the amount of housing credit dollar amount returned in the calendar year equals the housing credit dollar amount previously allocated to any project that does not become a qualified low-income housing project within the period required by this section or to any project with respect to which an allocation is canceled by mutual consent of the California Tax Credit Allocation Committee and the allocation recipient. (4) Five hundred thousand dollars ($500,000) per calendar year for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code. (5) The amount of any unallocated or returned credits under former Sections 17053.14, 23608.2, and 23608.3, as those sections read prior to January 1, 2009, until fully exhausted for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code. (h) The term “compliance period” as defined in Section 42(i)(1) of the Internal Revenue Code, relating to compliance period, is modified to mean, with respect to any building, the period of 30 consecutive taxable years beginning with the first taxable year of the credit period with respect thereto. (i) Section 42(j) of the Internal Revenue Code, relating to recapture of credit, shall not be applicable and the following requirements of this section shall be set forth in a regulatory agreement between the California Tax Credit Allocation Committee and the housing sponsor, and the regulatory agreement shall be subordinated, when required, to any lien or encumbrance of any banks or other institutional lenders to the project. The regulatory agreement entered into pursuant to subdivision (f) of Section 50199.14 of the Health and Safety Code shall apply, provided that the agreement includes all of the following provisions: (1) A term not less than the compliance period. (2) A requirement that the agreement be recorded in the official records of the county in which the qualified low-income housing project is located. (3) A provision stating which state and local agencies can enforce the regulatory agreement in the event the housing sponsor fails to satisfy any of the requirements of this section. (4) A provision that the regulatory agreement shall be deemed a contract enforceable by tenants as third-party beneficiaries thereto and that allows individuals, whether prospective, present, or former occupants of the building, who meet the income limitation applicable to the building, the right to enforce the regulatory agreement in any state court. (5) A provision incorporating the requirements of Section 42 of the Internal Revenue Code, relating to low-income housing credit, as modified by this section. (6) A requirement that the housing sponsor notify the California Tax Credit Allocation Committee or its designee if there is a determination by the Internal Revenue Service that the project is not in compliance with Section 42(g) of the Internal Revenue Code, relating to qualified low-income housing project. (7) A requirement that the housing sponsor, as security for the performance of the housing sponsor’s obligations under the regulatory agreement, assign the housing sponsor’s interest in rents that it receives from the project, provided that until there is a default under the regulatory agreement, the housing sponsor is entitled to collect and retain the rents. (8) A provision that the remedies available in the event of a default under the regulatory agreement that is not cured within a reasonable cure period include, but are not limited to, allowing any of the parties designated to enforce the regulatory agreement to collect all rents with respect to the project; taking possession of the project and operating the project in accordance with the regulatory agreement until the enforcer determines the housing sponsor is in a position to operate the project in accordance with the regulatory agreement; applying to any court for specific performance; securing the appointment of a receiver to operate the project; or any other relief as may be appropriate. (j) (1) The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and the allocation dates. (2) The committee shall adopt a qualified allocation plan, as provided in Section 42(m)(1) of the Internal Revenue Code, relating to plans for allocation of credit among projects. In adopting this plan, the committee shall comply with the provisions of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue Code, relating to qualified allocation plan and relating to certain selection criteria must be used, respectively. (3) Notwithstanding Section 42(m) of the Internal Revenue Code, relating to responsibilities of housing credit agencies, the California Tax Credit Allocation Committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions: (A) All housing sponsors, as defined by paragraph (3) of subdivision (a), shall demonstrate at the time the application is filed with the committee that the project meets the following threshold requirements: (i) The housing sponsor shall demonstrate that there is a need and demand for low-income housing in the community or region for which it is proposed. (ii) The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period. (iii) The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project. (iv) The housing sponsor shall have and maintain control of the site for the project. (v) The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances. (vi) The housing sponsor shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period. (vii) The housing sponsor shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, a supportable debt service, reserves, funds set aside for rental subsidies and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the eligible basis, as determined by the committee. (B) The committee shall give a preference to those projects satisfying all of the threshold requirements of subparagraph (A) if both of the following apply: (i) The project serves the lowest income tenants at rents affordable to those tenants. (ii) The project is obligated to serve qualified tenants for the longest period. (C) In addition to the provisions of subparagraphs (A) and (B), the committee shall use the following criteria in allocating housing credits: (i) Projects serving large families in which a substantial number, as defined by the committee, of all residential units are low-income units with three or more bedrooms. (ii) Projects providing single-room occupancy units serving very low income tenants. (iii) Existing projects that are “at risk of conversion,” as defined by paragraph (6) of subdivision (c). (iv) Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs. (v) Projects that provide tenant amenities not generally available to residents of low-income housing projects. (4) For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application. (D) Subparagraphs (B) and (C) shall not apply to projects receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g). (k) Section 42(l) of the Internal Revenue Code, relating to certifications and other reports to secretary, shall be modified as follows: The term “secretary” shall be replaced by the term “Franchise Tax Board.” (l) In the case in which the credit allowed under this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding years, if necessary, until the credit has been exhausted. (m) A project that received an allocation of a 1989 federal housing credit dollar amount shall be eligible to receive an allocation of a 1990 state housing credit dollar amount, subject to all of the following conditions: (1) The project was not placed in service prior to 1990. (2) To the extent the amendments made to this section by the Statutes of 1990 conflict with any provisions existing in this section prior to those amendments, the prior provisions of law shall prevail. (3) Notwithstanding paragraph (2), a project applying for an allocation under this subdivision shall be subject to the requirements of paragraph (3) of subdivision (j). (n) The credit period with respect to an allocation of credit in 1989 by the California Tax Credit Allocation Committee of which any amount is attributable to unallocated credit from 1987 or 1988 shall not begin until after December 31, 1989. (o) The provisions of Section 11407(a) of Public Law 101-508, relating to the effective date of the extension of the low-income housing credit, apply to calendar years after 1989. (p) The provisions of Section 11407(c) of Public Law 101-508, relating to election to accelerate credit, shall not apply. (q) (1) (A) For a project that receives a preliminary reservation under this section beginning on or after January 1, 2016, a taxpayer may elect, in the manner prescribed by the California Tax Credit Allocation Committee, to sell all or any portion of any credit allowed, subject to subparagraph (B). The taxpayer may make the election to sell pursuant to this subdivision at any time before the California Tax Credit Allocation Committee allocates a final credit amount for the project pursuant to this section, at which point the election shall become irrevocable. (B) A credit that a taxpayer elects to sell all or a portion of pursuant to this subdivision shall be sold for consideration that is not less than 80 percent of the amount of the credit. (2) (A) The taxpayer that originally received the credit shall report to the California Tax Credit Allocation Committee within 10 days of the sale of the credit, in the form and manner specified by the California Tax Credit Allocation Committee, all required information regarding the purchase and sale of the credit, including the social security or other taxpayer identification number of the unrelated party or parties to whom the credit has been sold, the face amount of the credit sold, and the amount of consideration received by the taxpayer for the sale of the credit. (B) The California Tax Credit Allocation Committee shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the California Tax Credit Allocation Committee and the Franchise Tax Board, of the taxpayers that have sold or purchased a credit pursuant to this subdivision. (3) A credit may be sold pursuant to this subdivision to more than one unrelated party. (4) Notwithstanding any other law, the taxpayer that originally received the credit that is sold pursuant to paragraph (1) shall remain solely liable for all obligations and liabilities imposed on the taxpayer by this section with respect to the credit, none of which shall apply to a party to whom the credit has been sold or subsequently transferred. Parties that purchase credits pursuant to paragraph (1) shall be entitled to utilize the purchased credits in the same manner in which the taxpayer that originally received the credit could utilize them. (5) A taxpayer shall not sell a credit allowed by this section if the taxpayer was allowed the credit on any tax return of the taxpayer. (r) The California Tax Credit Allocation Committee may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the California Tax Credit Allocation Committee pursuant to this section. (s) The amendments to this section made by Chapter 1222 of the Statutes of 1993 apply only to taxable years beginning on or after January 1, 1994. (t) This section shall remain in effect on and after December 1, 1990, for as long as Section 42 of the Internal Revenue Code, relating to low-income housing credit, remains in effect. Any unused credit may continue to be carried forward, as provided in subdivision (l), until the credit has been exhausted. (Amended by Stats. 2025, Ch. 492, Sec. 2. (AB 480) Effective January 1, 2026. Section conditionally inoperative pursuant to subd. (t).)
  11. 17059.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    This section creates a California tax credit administered by GO-Biz, with committee approval and written agreements setting the credit amount and terms.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17059.2. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2030, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2. (2) The credit under this section shall be allocated by GO-Biz with respect to the 2013–14 fiscal year through and including the 2027–28 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors: (A) The number of jobs the taxpayer will create or retain in this state. (B) The compensation paid or proposed to be paid by the taxpayer to its employees, including wages and fringe benefits. (C) The amount of investment in this state by the taxpayer. (D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayer’s project or business is proposed or located. (E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities. (F) The incentives available to the taxpayer in other states. (G) The duration of the proposed project and the duration the taxpayer commits to remain in this state. (H) The overall economic impact in this state of the taxpayer’s project or business. (I) The strategic importance of the taxpayer’s project or business to the state, region, or locality. (J) The opportunity for future growth and expansion in this state by the taxpayer’s business. (K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit. (L) For a credit allocated beginning with the 2018–19 fiscal year, the training opportunities offered by the taxpayer to its employees. (3) The written agreement entered into pursuant to paragraph (2) shall include: (A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period. (B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer. (C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement. (b) For purposes of this section: (1) “Committee” means the California Competes Tax Credit Committee established pursuant to Section 18410.2. (2) “GO-Biz” means the Governor’s Office of Business and Economic Development. (c) For purposes of this section, GO-Biz shall do the following: (1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty. (2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer. (3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2. (4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee. (5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee. (6) Post on its internet website all of the following: (A) The name of each taxpayer allocated a credit pursuant to this section. (B) The estimated amount of the investment by each taxpayer. (C) The estimated number of jobs created or retained. (D) The amount of the credit allocated to the taxpayer. (E) The amount of the credit recaptured from the taxpayer, if applicable. (F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county. (G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1). (7) Consider the extent to which the credit will influence the taxpayer’s ability, willingness, or both, to create jobs in this state that might not otherwise be created in the state by the taxpayer or any other taxpayer. GO-Biz may also consider other factors, including, but not limited to, the following: (A) The financial solvency of the taxpayer and the taxpayer’s ability to finance its proposed expansion. (B) The taxpayer’s current and prior compliance with federal and state laws. (C) Current and prior litigation involving the taxpayer. (D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section. (E) For allocation periods beginning with the 2023–24 fiscal year, the taxpayer’s willingness to relocate jobs into California from a state that has enacted a law that does any of the following: (i) Voids or repeals, or has the effect of voiding or repealing, existing state protections against discrimination on the basis of sexual orientation, gender identity, or gender expression. (ii) Authorizes or requires discrimination against same-sex couples or their families, or discrimination on the basis of sexual orientation, gender identity, or gender expression. (iii) Creates an exemption to antidiscrimination laws in order to permit discrimination against same-sex couples or their families, or permits discrimination on the basis of sexual orientation, gender identity, or gender expression. (iv) Denies or interferes with, or has the effect of denying or interfering with, a woman’s right to choose to bear a child or to choose and obtain an abortion, as provided by Article 2.5 (commencing with Section 123460) of Chapter 2 of Part 2 of Division 106 of the Health and Safety Code. (F) For allocation periods beginning with the 2023–24 fiscal year, the taxpayer’s commitment to treating their workforce fairly and creating quality, full-time, wage and salary jobs in the state, evidence of which may include, but not be limited to, the following: (i) Training, career ladder, apprenticeship, and preapprenticeship programs for nonsupervisorial employees. (ii) Joint labor-management letter of support. (iii) A high percentage of full-time wage and salary employees compared to part-time, temporary, and independent contractors. (iv) Little to no history of a bad safety record, or resolved or pending litigation, violations, citations, fines, or penalties relating to any state or federal environmental and labor laws within the last 10 years. (G) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized. (8) (A) Implementation of subparagraphs (E) and (F) of paragraph (7) of this subdivision for the 2022–23 fiscal year is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the Governor’s Office of Business and Economic Development is hereby authorized to adopt emergency regulations to implement subparagraphs (E) and (F) of paragraph (7) of this subdivision during the 2022–23 fiscal year in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). (B) Nothing in this subdivision shall require the Governor’s Office of Business and Economic Development to approve emergency regulations. (d) For purposes of this section, the Franchise Tax Board shall do all of the following: (1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz. (B) In the case of a taxpayer that is a “small business,” as defined in Section 17053.73, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state. (2) Notwithstanding Section 19542, notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination. (e) In the case where the credit allowed under this section exceeds the “net tax,” as defined in Section 17039, for a taxable year, the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted. (f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committee’s recapture determination occurred. (g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 23689 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E): (A) Thirty million dollars ($30,000,000) for the 2013–14 fiscal year, one hundred fifty million dollars ($150,000,000) for the 2014–15 fiscal year, two hundred million dollars ($200,000,000) for each fiscal year from 2015–16 to 2017–18, inclusive, one hundred eighty million dollars ($180,000,000) for each fiscal year from 2018–19 to 2020–21, inclusive, two hundred ninety million dollars ($290,000,000) for the 2021–22 fiscal year, and one hundred eighty million dollars ($180,000,000) for each fiscal year from 2022–23 to 2027–28, inclusive. (B) The unallocated credit amount, if any, from the preceding fiscal year. (C) The amount of any previously allocated credits that have been recaptured. (D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the California Department of Tax and Fee Administration, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 23626, and 23689 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year. (i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or the Chairperson’s designee, may determine. (ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0). (E) (i) For the 2015–16 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636. (ii) If the amount available per fiscal year pursuant to this section and Section 23689 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 23689 for the next fiscal year shall be reduced by the amount of that deficit. (iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 23689 shall continue if the repeal dates of the credits allowed by this section and Section 23689 are removed or extended. (2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 23689 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 2027–28 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 23689, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 2027–28 fiscal year. (B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636. (3) Each fiscal year through the 2017–18 fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 23689 shall be reserved for small business, as defined in Section 17053.73 or 23626. (4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer. (h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. (i) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall comply with existing law on the date the agreement is executed. (j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 2013–14 fiscal year to the 2029–30 fiscal year, inclusive. (2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the department’s estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts. (k) (1) Section 19542 shall apply to all information obtained by the Franchise Tax Board and GO-Biz for the purpose of administering the California Competes Tax Credit established under this section. (2) Notwithstanding Section 19542 and paragraph (1), the Franchise Tax Board may disclose information to GO-Biz and GO-Biz may disclose information to the Franchise Tax Board for administration of the California Competes Tax Credit established under this section. (l) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Amended by Stats. 2022, Ch. 55, Sec. 7. (AB 194) Effective June 30, 2022. Repealed as of December 1, 2030, by its own provisions.)
  12. 17061.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. )

    Verify source ↗

    A person entitled to certain unemployment insurance refunds gets a credit against this tax, and any excess becomes a tax refund. If the Franchise Tax Board disallows the credit or refund, it must notify the claimant.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2. Imposition of Tax [17041 - 17061] ( Chapter 2 repealed and added by Stats. 1955, Ch. 939. ) ## 17061. (a) In the case of a person entitled to a refund pursuant to Section 1176 of the Unemployment Insurance Code, there shall be a credit against the tax imposed under this part in the amount of such refund. If the tax due after deduction of any other credit under this part is less than the credit allowable pursuant to this section, the difference shall be a tax refund. (b) If the Franchise Tax Board disallows the refund or credit provided for by this section, the Franchise Tax Board shall notify the claimant accordingly. The Franchise Tax Board’s action upon the credit or refund is final unless the claimant files a protest with the Director of Employment Development pursuant to Section 1176.5 of the Unemployment Insurance Code. None of the remedies provided by this part shall be available to such claimant. (Amended by Stats. 1977, Ch. 1252.)
  13. 17062.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. )

    Verify source ↗

    This section imposes an alternative minimum tax equal to the excess of tentative minimum tax over regular tax, and sets rules for exemption amounts and their annual inflation adjustment.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. ) ## 17062. (a) In addition to the other taxes imposed by this part, there is hereby imposed for each taxable year, a tax equal to the excess, if any, of: (1) The tentative minimum tax for the taxable year, over (2) The regular tax for the taxable year. (b) For purposes of this chapter, each of the following applies: (1) The tentative minimum tax shall be computed in accordance with Sections 55 to 59, inclusive, of the Internal Revenue Code, except as otherwise provided in this part. (2) The regular tax shall be the amount of tax imposed by Section 17041 or 17048, before reduction for any credits against the tax, less any amount imposed under paragraph (1) of subdivision (d) and paragraph (1) of subdivision (e) of Section 17560. (3) (A) The provisions of Section 55(b)(1) of the Internal Revenue Code shall be modified to provide that the tentative minimum tax for the taxable year shall be equal to the following percent of so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount, before reduction for any credits against the tax: (i) For any taxable year beginning on or after January 1, 1991, and before January 1, 1996, 8.5 percent. (ii) For any taxable year beginning on or after January 1, 1996, and before January 1, 2009, 7 percent. (iii) For taxable years beginning on and after January 1, 2009, and before January 1, 2011, 7.25 percent. (iv) For any taxable year beginning on or after January 1, 2011, 7 percent. (B) In the case of a nonresident or part-year resident, the tentative minimum tax shall be computed by multiplying the alternative minimum taxable income of the nonresident or part-year resident, as defined in subparagraph (C), by a rate (expressed as a percentage) equal to the tax computed under subdivision (b) on the alternative minimum taxable income of the nonresident or part-year resident as if the nonresident or part-year resident were a resident of this state for the taxable year and as if the nonresident or part-year resident were a resident of this state for all prior taxable years for any carryover items, deferred income, suspended losses, or suspended deductions, divided by the amount of that income. (C) For purposes of this section, the term “alternative minimum taxable income of a nonresident or part-year resident” includes each of the following: (i) For any period during which the taxpayer was a resident of this state (as defined by Section 17014), all items of alternative minimum taxable income (as modified for purposes of this chapter), regardless of source. (ii) For any period during which the taxpayer was not a resident of this state, alternative minimum taxable income (as modified for purposes of this chapter) which were derived from sources within this state, determined in accordance with Article 9 of Chapter 3 (commencing with Section 17301) and Chapter 11 (commencing with Section 17951). (iii) For purposes of computing “alternative minimum taxable income of a nonresident or part-year resident,” any carryover items, deferred income, suspended losses, or suspended deductions shall only be allowable to the extent that the carryover item, suspended loss, or suspended deduction was derived from sources within this state. (4) The provisions of Section 55(b)(2) of the Internal Revenue Code, relating to alternative minimum taxable income, shall be modified to provide that alternative minimum taxable income shall not include the income, adjustments, and items of tax preference attributable to any trade or business of a qualified taxpayer. (A) For purposes of this paragraph, “qualified taxpayer” means a taxpayer who meets both of the following: (i) Is the owner of, or has an ownership interest in, a trade or business. (ii) Has aggregate gross receipts, less returns and allowances, of less than one million dollars ($1,000,000) during the taxable year from all trades or businesses of which the taxpayer is the owner or has an ownership interest, in the amount of that taxpayer’s proportionate interest in each trade or business. (B) For purposes of this paragraph, “aggregate gross receipts, less returns and allowances” means the sum of the gross receipts of the trades or businesses that the taxpayer owns and the proportionate interest of the gross receipts of the trades or businesses that the taxpayer owns and of pass-through entities in which the taxpayer holds an interest. (C) For purposes of this paragraph, “gross receipts, less returns and allowances” means the sum of the gross receipts from the production of business income, as defined in subdivision (a) of Section 25120, and the gross receipts from the production of nonbusiness income, as defined in subdivision (d) of Section 25120. (D) For purposes of this paragraph, “proportionate interest” means: (i) In the case of a pass-through entity that reports a profit for the taxable year, the taxpayer’s profit interest in the entity at the end of the taxpayer’s taxable year. (ii) In the case of a pass-through entity that reports a loss for the taxable year, the taxpayer’s loss interest in the entity at the end of the taxpayer’s taxable year. (iii) In the case of a pass-through entity that is sold or liquidates during the taxable year, the taxpayer’s capital account interest in the entity at the time of the sale or liquidation. (E) (i) For purposes of this paragraph, “proportionate interest” includes an interest in a pass-through entity. (ii) For purposes of this paragraph, “pass-through entity” means any of the following: (I) A partnership, as defined by Section 17008. (II) An “S” corporation, as provided in Chapter 4.5 (commencing with Section 23800) of Part 11. (III) A regulated investment company, as provided in Section 24871. (IV) A real estate investment trust, as provided in Section 24872. (V) A real estate mortgage investment conduit, as provided in Section 24874. (5) For taxable years beginning on or after January 1, 1998, Section 55(d)(1) of the Internal Revenue Code, relating to exemption amount for taxpayers other than corporations is modified, for purposes of this part, to provide the following exemption amounts in lieu of those contained therein: (A) Fifty-seven thousand two hundred sixty dollars ($57,260) in the case of either of the following: (i) A joint return. (ii) A surviving spouse. (B) Forty-two thousand nine hundred forty-five dollars ($42,945) in the case of an individual who is both of the following: (i) Not a married individual. (ii) Not a surviving spouse. (C) Twenty-eight thousand six hundred thirty dollars ($28,630) in the case of either of the following: (i) A married individual who files a separate return. (ii) An estate or trust. (6) For taxable years beginning on or after January 1, 1998, Section 55(d)(3) of the Internal Revenue Code, relating to phaseout of exemption amount, is modified, for purposes of this part, to provide the following phaseout of exemption amounts in lieu of those contained therein: (A) Two hundred fourteen thousand seven hundred twenty-five dollars ($214,725) in the case of a taxpayer described in subparagraph (A) of paragraph (5). (B) One hundred sixty-one thousand forty-four dollars ($161,044) in the case of a taxpayer described in subparagraph (B) of paragraph (5). (C) One hundred seven thousand three hundred sixty-two dollars ($107,362) in the case of a taxpayer described in subparagraph (C) of paragraph (5). (7) For each taxable year beginning on or after January 1, 1999, the Franchise Tax Board shall recompute the exemption amounts prescribed in paragraph (5) and the phaseout of exemption amounts prescribed in paragraph (6). Those computations shall be made as follows: (A) The California Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year. (B) The Franchise Tax Board shall do both of the following: (i) Compute an inflation adjustment factor by adding 100 percent to the percentage change figure that is furnished pursuant to subparagraph (A) and dividing the result by 100. (ii) Multiply the preceding taxable year exemption amounts and the phaseout of exemption amounts by the inflation adjustment factor determined in clause (i) and round off the resulting products to the nearest one dollar ($1). (c) (1) Section 56(b)(1)(E) of the Internal Revenue Code, relating to standard deduction and deduction for personal exemptions not allowed, is modified, for purposes of this part, to deny the standard deduction allowed by Section 17073.5. (2) Section 56(b)(3) of the Internal Revenue Code, relating to treatment of incentive stock options, shall be modified to additionally provide the following: (A) Section 421 of the Internal Revenue Code does not apply to the transfer of stock acquired pursuant to the exercise of a California qualified stock option under Section 17502. (B) Section 422(c)(2) of the Internal Revenue Code applies in any case in which the disposition and inclusion of a California qualified stock option for purposes of this chapter are within the same taxable year, and that section does not apply in any other case. (C) The adjusted basis of any stock acquired by the exercise of a California qualified stock option shall be determined on the basis of the treatment prescribed by this paragraph. (d) The provisions of Section 57(a)(5) of the Internal Revenue Code, relating to tax-exempt interest, shall not apply. (e) The provisions of Section 59(a) of the Internal Revenue Code, relating to the alternative minimum tax foreign tax credit, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 5. (SB 711) Effective October 1, 2025.)
  14. 17062.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. )

    Verify source ↗

    For this chapter, the cited federal tax provision on alternative minimum tax applies as it read on January 1, 2015, unless another rule says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. ) ## 17062.1. For the purposes of this chapter, Part VI of Subchapter A of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to alternative minimum tax, as it read on January 1, 2015, shall apply, except as otherwise provided. (Added by Stats. 2025, Ch. 231, Sec. 6. (SB 711) Effective October 1, 2025.)
  15. 17062.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. )

    Verify source ↗

    Section 56A of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. ) ## 17062.3. Section 56A of the Internal Revenue Code, relating to adjusted financial statement income, shall not apply. (Repealed and added by Stats. 2025, Ch. 231, Sec. 9. (SB 711) Effective October 1, 2025.)
  16. 17062.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. )

    Verify source ↗

    Section 55(b)(3) of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. ) ## 17062.5. Section 55(b)(3) of the Internal Revenue Code, relating to maximum rate of tax on net capital gain of noncorporate taxpayers, shall not apply. (Added by Stats. 1998, Ch. 322, Sec. 15. Effective August 20, 1998.)
  17. 17063.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. )

    Verify source ↗

    The minimum tax credit is allowed as a credit against net tax for a taxable year, and its calculation is tied to federal rules with specific California exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 2.1. Alternative Minimum Tax [17062 - 17063] ( Chapter 2.1 repealed and added by Stats. 1987, Ch. 1138, Sec. 41. ) ## 17063. (a) There shall be allowed as a credit against the net tax (as defined by Section 17039) for any taxable year an amount equal to the minimum tax credit for that taxable year. (b) For purposes of subdivision (a), the minimum tax credit shall be determined in accordance with Section 53 of the Internal Revenue Code, except as otherwise provided in this part. (c) For purposes of this chapter, the amount determined under Section 53(c)(1) of the Internal Revenue Code shall be the regular tax as defined by paragraph (2) of subdivision (b) of Section 17062, reduced by the sum of the credits allowable under this part, other than: (1) The credits described in paragraph (7) of subdivision (a) of Section 17039. (2) A credit that reduces the tax below the tentative minimum tax, as defined by Section 17062. (d) Section 53(e) of the Internal Revenue Code, relating to the application to applicable corporations, does not apply. (Amended by Stats. 2025, Ch. 231, Sec. 10. (SB 711) Effective October 1, 2025.)
  18. 17071.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Section 61 of the Internal Revenue Code on gross income applies here, unless another provision provides otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17071. Section 61 of the Internal Revenue Code, relating to gross income defined, shall apply, except as otherwise provided. (Amended by Stats. 1999, Ch. 987, Sec. 7. Effective October 10, 1999.)
  19. 17072.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Section 62 of the Internal Revenue Code applies here, except where this section says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided. (b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply. (c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply. (Amended by Stats. 2010, Ch. 14, Sec. 9. (SB 401) Effective January 1, 2011.)
  20. 17073.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    This section applies Internal Revenue Code section 63 to taxable income, limits one energy-efficiency-related deduction from being treated as a miscellaneous itemized deduction, and allows a standard deduction for individuals who do not itemize.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17073. (a) Section 63 of the Internal Revenue Code, relating to taxable income defined, shall apply, except as otherwise provided. (b) The deduction allowed by Section 17208.1, relating to interest on loans or financed indebtedness obtained from a publicly owned utility for the purchase and installation of energy efficient products or equipment, may not be treated as a miscellaneous itemized deduction under Section 67(a) of the Internal Revenue Code, relating to the 2-percent floor on miscellaneous deductions. (c) For individuals who do not itemize deductions, the standard deduction computed in accordance with Section 17073.5 shall be allowed as a deduction in computing taxable income. (Amended by Stats. 2002, Ch. 664, Sec. 202. Effective January 1, 2003.)
  21. 17073.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Taxpayers may elect a standard deduction, with different amounts for different filing statuses, and the Franchise Tax Board must annually recompute the amounts using CPI changes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17073.5. (a) A taxpayer may elect to take a standard deduction as follows: (1) In the case of a taxpayer, other than a head of a household or a surviving spouse (as defined in Section 17046) or a married couple filing a joint return, the standard deduction shall be one thousand eight hundred eighty dollars ($1,880). (2) In the case of a head of household or a surviving spouse (as defined in Section 17046) or a married couple filing a joint return, the standard deduction shall be three thousand seven hundred sixty dollars ($3,760). (b) The standard deduction provided for in subdivision (a) shall be in lieu of all deductions other than those which are to be subtracted from gross income in computing adjusted gross income under Section 17072. (c) (1) The provisions of this section shall be applied in lieu of the provisions of Sections 63(c) and 63(f) of the Internal Revenue Code, relating to standard deductions. (2) Notwithstanding paragraph (1), Section 63(c)(5) of the Internal Revenue Code, relating to limitations on the standard deduction of certain dependents, and Section 63(c)(6)of the Internal Revenue Code, relating to certain individuals not eligible for the standard deduction, shall apply, except as otherwise provided. For purposes of this paragraph, the amount specified in Section 63(c)(5) of the Internal Revenue Code shall be adjusted for inflation in accordance with the provisions of Section 63(c)(4) of the Internal Revenue Code. (d) For each taxable year beginning on or after January 1, 1988, the Franchise Tax Board shall recompute the standard deduction amounts prescribed in subdivision (a). That computation shall be made as follows: (1) The California Department of Industrial Relations shall transmit annually to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the prior calendar year to June of the current calendar year, no later than August 1 of the current calendar year. (2) The Franchise Tax Board shall compute an inflation adjustment factor by adding 100 percent to that portion of the percentage change figure which is furnished pursuant to paragraph (1) and dividing the result by 100. (3) The Franchise Tax Board shall multiply the standard deduction amounts in the preceding taxable year by the inflation adjustment factor determined in paragraph (2), and round off the resulting products to the nearest one dollar ($1). (4) In computing the standard deduction amounts pursuant to this subdivision, the amount provided in paragraph (2) of subdivision (a) shall be twice the amount provided in paragraph (1) of subdivision (a). (Amended by Stats. 1998, Ch. 322, Sec. 16. Effective August 20, 1998.)
  22. 17074.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Section 64 of the Internal Revenue Code on ordinary income applies here, except where otherwise provided.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17074. Section 64 of the Internal Revenue Code, relating to ordinary income defined, shall apply, except as otherwise provided. (Amended by Stats. 1999, Ch. 987, Sec. 9. Effective October 10, 1999.)
  23. 17075.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Section 65 of the Internal Revenue Code applies here, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17075. Section 65 of the Internal Revenue Code, relating to ordinary loss defined, shall apply, except as otherwise provided. (Amended by Stats. 1999, Ch. 987, Sec. 10. Effective October 10, 1999.)
  24. 17076.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    This section makes Internal Revenue Code Section 67 apply, with exceptions, and says Section 67(g) does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17076. (a) Section 67 of the Internal Revenue Code, relating to the 2-percent floor on miscellaneous itemized deductions, shall apply, except as otherwise provided. (b) A deduction allowable under this part that exceeds three thousand dollars ($3,000) and is described in Section 17049, relating to computation of tax where the taxpayer restores a substantial amount held under claim of right, may not be treated as a miscellaneous itemized deduction under Section 67 of the Internal Revenue Code, as applicable for purposes of this part. (c) Section 67(g) of the Internal Revenue Code, relating to suspension for taxable years 2018 to 2025, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 11. (SB 711) Effective October 1, 2025.)
  25. 17077.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    This section applies Internal Revenue Code Section 68 on itemized deduction limits, but changes some rules and amounts.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17077. Section 68 of the Internal Revenue Code, relating to overall limitation on itemized deductions, shall apply, except as otherwise provided. (a) “Six percent” shall be substituted for “3 percent” in Section 68(a)(1) of the Internal Revenue Code. (b) Section 68(b)(1) of the Internal Revenue Code shall not apply and in lieu thereof the term “applicable amount” in each place it appears in Section 68(a) of the Internal Revenue Code means one hundred thousand dollars ($100,000) in the case of a single individual, or a spouse filing a separate return, one hundred fifty thousand dollars ($150,000) in the case of a head of household, and two hundred thousand dollars ($200,000) in the case of a surviving spouse, or spouses filing a joint return. (c) Section 68(b)(2) of the Internal Revenue Code, relating to inflation adjustments, shall not apply. However, for any taxable year beginning on or after January 1, 1992, the applicable amounts specified in subdivision (b) shall be recomputed annually in the same manner as the recomputation of income tax brackets under subdivision (h) of Section 17041. (d) Section 68(f) of the Internal Revenue Code, relating to phaseout of limitation, shall not apply. (e) Section 68(g) of the Internal Revenue Code, relating to termination, shall not apply. (Amended by Stats. 2016, Ch. 50, Sec. 100. (SB 1005) Effective January 1, 2017.)
  26. 17078.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. )

    Verify source ↗

    Section 988 of the Internal Revenue Code applies to certain foreign currency transactions, except as otherwise provided, and section 988(a)(3) does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 1. Definition of Gross Income, Adjusted Gross Income, Taxable Income, etc. [17071 - 17078] ( Article 1 repealed and added by Stats. 1983, Ch. 488, Sec. 22. ) ## 17078. (a) Section 988 of the Internal Revenue Code, relating to treatment of certain foreign currency transactions, shall apply, except as otherwise provided. (b) Section 988(a)(3) of the Internal Revenue Code, relating to source, shall not apply. (Amended by Stats. 1993, Ch. 877, Sec. 13. Effective October 6, 1993.)
  27. 17081.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    This section makes the referenced Internal Revenue Code rule on items included in gross income apply, unless another rule says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17081. Part II of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to items that are specifically included in gross income, shall apply, except as otherwise provided. (Amended by Stats. 1993, Ch. 873, Sec. 5. Effective October 6, 1993.)
  28. 17082.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    This section generally includes the income of an incomplete gift nongrantor trust in a qualified taxpayer’s gross income, unless the subdivision (c) conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17082. (a) For taxable years beginning on or after January 1, 2023, the income of an incomplete gift nongrantor trust shall be included in a qualified taxpayer’s gross income to the extent the income of the trust would be taken into account in computing the qualified taxpayer’s taxable income if the trust in its entirety were treated as a grantor trust under Section 17731. (b) Notwithstanding subdivision (a), Section 17745 applies to distributions from an incomplete gift nongrantor trust. (c) Notwithstanding subdivision (a), the income of an incomplete gift nongrantor trust shall not be included in a qualified taxpayer’s gross income for a taxable year if all of the following apply: (1) The fiduciary of the incomplete gift nongrantor trust timely files an original California Fiduciary Income Tax Return and makes an irrevocable election on that return to be taxed as a resident nongrantor trust, pursuant to Chapter 9 (commencing with Section 17731). The election shall be made in the form and manner prescribed by the Franchise Tax Board. (2) The incomplete gift nongrantor trust is a nongrantor trust pursuant to Chapter 9 (commencing with Section 17731). (3) Ninety percent or more of the distributable net income of the incomplete gift nongrantor trust, pursuant to Chapter 9 (commencing with Section 17731), is distributed, or treated as being distributed pursuant to Section 17752 or 17731, including subdivision (a), for purposes of Chapter 9 (commencing with Section 17731), to a charitable organization, as defined in Section 501(c)(3) of the Internal Revenue Code. (d) For purposes of this section, the following definitions apply: (1) (A) “Incomplete gift nongrantor trust” means a trust that meets both of the following conditions: (i) The trust does not qualify as a grantor trust under Subpart E of Part I of Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to grantors and others treated as substantial owners. (ii) The qualified taxpayer’s transfer of assets to the trust is treated as an incomplete gift under Section 2511 of the Internal Revenue Code, relating to transfers in general. (B) “Incomplete gift nongrantor trust” shall not include a trust, or portion of a trust, that qualifies as a charitable remainder trust under Section 664 of the Internal Revenue Code. (2) “Qualified taxpayer” means a grantor of an incomplete gift nongrantor trust. (3) “Resident nongrantor trust” means a trust that is not a grantor trust and where the tax applies to the entire taxable income of the trust based on the residency of the fiduciary or beneficiary in accordance with Section 17742. (e) (1) The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section. (2) The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, procedure, or other guidance prescribed by the Franchise Tax Board pursuant to this section. (Amended by Stats. 2025, Ch. 410, Sec. 2. (SB 376) Effective January 1, 2026.)
  29. 17083.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    Section 85 of the Internal Revenue Code, dealing with unemployment compensation, does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17083. Section 85 of the Internal Revenue Code, relating to unemployment compensation, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 14. Effective October 10, 1999.)
  30. 17085.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    This section modifies how certain federal retirement and annuity tax rules apply for California income tax purposes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17085. Section 72 of the Internal Revenue Code, relating to annuities, certain proceeds of endowment and life insurance contracts, is modified as follows: (a) The amendments and transitional rules made by Public Law 99-514 shall be applicable to this part for the same transactions and the same years as they are applicable for federal purposes, except that the repeal of Section 72(d) of the Internal Revenue Code, relating to repeal of special rule for employees’ annuities, shall apply only to the following: (1) Any individual whose annuity starting date is after December 31, 1986. (2) At the election of the taxpayer, any individual whose annuity starting date is after July 1, 1986, and before January 1, 1987. (b) The amount of a distribution from an individual retirement account or annuity or employee trust or employee annuity that is includable in gross income for federal purposes shall be reduced for purposes of this part by the lesser of either of the following: (1) An amount equal to the amount includable in federal gross income for the taxable year. (2) An amount equal to the basis in the account or annuity allowed by Section 17507 (relating to individual retirement accounts and simplified employee pensions), the increased basis allowed by Sections 17504 and 17506 (relating to plans of self-employed individuals), the increased basis allowed by Section 17501, or the increased basis allowed by Section 17551 that is remaining after adjustment for reductions in gross income under this provision in prior taxable years. (c) (1) Except as provided in paragraph (2), the amount of the additional tax imposed under this part shall be computed in accordance with Sections 72(m), (q), (t), and (v) of the Internal Revenue Code, as applicable for federal income tax purposes for the same taxable year, using a rate of 21/2 percent, in lieu of the rate provided in those sections. (2) In the case where Section 72(t)(6) of the Internal Revenue Code, relating to special rules for simple retirement accounts, as applicable for federal income tax purposes for the same taxable year, applies, the rate in paragraph (1) shall be 6 percent in lieu of the 21/2 percent rate specified therein. (d) Section 72(f)(2) of the Internal Revenue Code shall be applicable without applying the exceptions which immediately follow that paragraph. (e) The amendments made by Section 844 of the federal Pension Protection Act of 2006 (Public Law 109-280) to Section 72(e) of the Internal Revenue Code, shall not apply. (f) For purposes of this part, Section 2202(b) of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), relating to loans from qualified plans shall apply. (g) For purposes of this part, Section 302(c) of Title III of the Consolidated Appropriations Act, 2021 (Public Law 116-260), relating to loans from qualified plans, shall apply. (Amended by Stats. 2025, Ch. 231, Sec. 12. (SB 711) Effective October 1, 2025.)
  31. 17085.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    For certain distributions from a qualified retirement plan made because of a notice to withhold, no additional tax is imposed under Section 72(t).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17085.7. (a) In the case of any distribution made on account of a notice to withhold (pursuant to Section 18670 or 18670.5) on a qualified retirement plan, no additional tax shall be imposed in accordance with Section 72(t) of the Internal Revenue Code. (b) This section shall apply to distributions after December 31, 1999. (Added by Stats. 1999, Ch. 931, Sec. 4. Effective October 10, 1999.)
  32. 17086.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    Taxpayers may elect to treat certain noncash patronage allocations as income in the year received, but the choice affects how they are reported and handled in later years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17086. (a) Noncash patronage allocations from farmers’ cooperative and mutual associations (whether paid in capital stock, revolving fund certificates, retain certificates, certificates of indebtedness, letters of advice or in some other manner that discloses the dollar amount of those noncash patronage allocations) may, at the election of the taxpayer, be considered as income and included in gross income for the taxable year in which received. (b) If a taxpayer exercises the election provided for in subdivision (a), the amount included in gross income shall be the face amount of those allocations. (c) If a taxpayer elects to exclude noncash patronage allocations from gross income for the taxable year in which received, those allocations shall be included in gross income in the year that they are redeemed or realized upon. (d) If a taxpayer exercises the election provided for in subdivision (c), the face amount of those noncash patronage allocations shall be disclosed in the return made for the taxable year in which those noncash patronage allocations were received. (e) If a taxpayer exercises the election provided for in subdivision (a) or (c) for any taxable year, then the method of computing income so adopted shall be adhered to with respect to all subsequent taxable years unless with the approval of the Franchise Tax Board a change to a different method is authorized. (f) If a taxpayer has made the election provided for in subdivision (c), then (1) the statutory period for the assessment of a deficiency for any taxable year in which the amount of any noncash patronage allocations are realized shall not expire prior to the expiration of four years from the date the Franchise Tax Board is notified by the taxpayer (in the manner as the Franchise Tax Board may by regulation prescribe) of the realization of gain on those allocations; and (2) that deficiency may be assessed prior to the expiration of that four-year period, notwithstanding the provisions of Section 19057 or the provisions of any other law or rule of law which would otherwise prevent that assessment. (Amended by Stats. 1993, Ch. 31, Sec. 6. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  33. 17087.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    Three specified Internal Revenue Code sections do not apply under this provision.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17087. (a) Section 86 of the Internal Revenue Code, relating to Social Security and Tier 1 Railroad Retirement Benefits, shall not apply. (b) Section 72(r) of the Internal Revenue Code, relating to Tier 2 Railroad Retirement Benefits, shall not apply. (c) Section 105(h) of the Internal Revenue Code, relating to sick pay under the Railroad Unemployment Insurance Act, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 18. Effective October 10, 1999.)
  34. 17087.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    This section makes federal Subchapter S rules apply for S corporations and their shareholders, except where this part or Part 11 provides otherwise, and it excludes Section 1371(f).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17087.5. (a) Subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to tax treatment of “S corporations” and their shareholders, shall apply, except as otherwise provided under this part or Part 11 (commencing with Section 23001). (b) Section 1371(f) of the Internal Revenue Code, relating to cash distributions following post-termination transition period, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 13. (SB 711) Effective October 1, 2025.)
  35. 17087.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    If an LLC is treated as a partnership for California tax purposes, a person with a membership or economic interest must take into account amounts recognized under Chapter 10.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17087.6. If a limited liability company is classified as a partnership for California tax purposes, a person with a membership or economic interest shall take into account amounts required to be recognized under Chapter 10 (commencing with Section 17851). (Added by Stats. 1994, Ch. 1200, Sec. 52. Effective September 30, 1994.)
  36. 17088.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    This section makes certain Internal Revenue Code rules apply for California income tax, with specific substitutions and exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17088. (a) Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to regulated investment companies and real estate investment trusts, shall apply, except as otherwise provided. (b) Section 17145 shall apply in lieu of Section 852(b)(5) of the Internal Revenue Code, relating to exempt-interest dividends. (c) (1) Section 852(b)(3)(D) of the Internal Revenue Code, relating to treatment by shareholders of undistributed capital gains, shall not apply. (2) Section 852(g)(1)(A) of the Internal Revenue Code is modified by substituting the phrase “subdivision (a) of Section 17145” for the phrase “the first sentence of subsection (b)(5)” contained therein. (Amended by Stats. 2015, Ch. 359, Sec. 5. (AB 154) Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  37. 17088.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    Two specified federal tax amendments do not apply in this section.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17088.1. (a) The amendments made to Section 860E(a)(3)(B) of the Internal Revenue Code by Section 2303(a)(2)(C) of Public Law 116-136, relating to conforming amendments, shall not apply. (b) The amendments made to Section 860E(a)(4) of the Internal Revenue Code by Section 10101(a)(4)(B)(ii) of Public Law 117-169, relating to conforming adjustments, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 14. (SB 711) Effective October 1, 2025.)
  38. 17088.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    California tax law makes Internal Revenue Code section 7518 apply here, with several specified modifications and exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17088.3. (a) Section 7518 of the Internal Revenue Code, relating to tax incentives relating to merchant marine capital construction funds, shall apply, except as otherwise provided. (b) Section 7518(d)(2)(C) of the Internal Revenue Code is modified as follows: (1) By substituting “70 percent” in lieu of the reference to “the percentage applicable under Section 243(a)(1).” (2) To refer to Section 24402 in lieu of Section 243 of the Internal Revenue Code. (c) Section 7518(d)(2)(D) of the Internal Revenue Code is modified to refer to “interest income exempt from taxation under this part” in lieu of “interest income exempt from taxation under Section 103.” (d) Section 7518(g)(3) of the Internal Revenue Code is modified as follows: (1) To refer to Article 6 (commencing with Section 19101) of Chapter 4 of Part 10.2 in lieu of Section 6601 of the Internal Revenue Code. (2) To refer to Article 7 (commencing with Section 19131) of Chapter 4 of Part 10.2 in lieu of Section 6651 of the Internal Revenue Code. (e) Section 7518(g)(6) of the Internal Revenue Code is modified as follows: (1) By substituting a reference to “this part” in lieu of “Chapter 1” in each place in which it appears. (2) To refer to Section 17041 in lieu of Section 1 of the Internal Revenue Code. (3) The last sentence in Section 7518(g)(6)(A) of the Internal Revenue Code shall not apply. (Added by Stats. 1997, Ch. 611, Sec. 12. Effective October 3, 1997.)
  39. 17090.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    Gross income includes employee cash allowances paid under a parking cash-out program, except the part used for ridesharing and excluded under Section 17149.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17090. Gross income includes cash allowances received by an employee under a parking cash-out program, except any portion used for a ridesharing purpose and excluded from gross income by Section 17149. (Added by Stats. 1992, Ch. 554, Sec. 6. Effective January 1, 1993.)
  40. 17091.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. )

    Verify source ↗

    California RTC section 17091 says IRC Section 71 on alimony and separate maintenance payments applies as of January 1, 2015, with stated exceptions, and the section sunsets on December 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 2. Items Specifically Included in Gross Income [17081 - 17091] ( Article 2 repealed and added by Stats. 1983, Ch. 488, Sec. 24. ) ## 17091. (a) Section 71 of the Internal Revenue Code, relating to alimony and separate maintenance payments, as it read on January 1, 2015, shall apply, except as otherwise provided. (b) Subdivision (a) shall not apply for any divorce or separation instrument executed after December 31, 2025, or for any divorce or separation instrument executed on or before December 31, 2025, and modified after that date, if the modification expressly provides that the amendments made by this subdivision apply to such modification. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2025, Ch. 231, Sec. 15. (SB 711) Effective October 1, 2025. Repealed as of December 1, 2027, by its own provisions.)
  41. 171.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.5. Disaster Relief [170 - 171.5] ( Chapter 2.5 added by Stats. 1979, Ch. 242. )

    Verify source ↗

    This section delays collection and interest/penalties on certain 1992–93 delinquent property taxes on qualified residential real property, and lets eligible owners file relief and refund claims.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.5. Disaster Relief [170 - 171.5] ( Chapter 2.5 added by Stats. 1979, Ch. 242. ) ## 171. (a) Notwithstanding any other provision of law, no interest or penalties shall be imposed or collected with respect to any delinquent installments of property taxes levied for the 1992–93 fiscal year on qualified residential real property. (b) The county treasurer or tax collector shall not take any collection action, and shall cease any collection action that has commenced, with respect to any delinquent property taxes for the 1992–93 fiscal year that were levied on qualified real property, until on or after January 1, 1994. The treasurer or tax collector may impose any applicable interest and penalties on any delinquent property taxes levied on qualified real property for the 1992–93 fiscal year beginning on or after January 1, 1994, if those taxes or any portion thereof remain delinquent on or after that date. (c) For purposes of this section: (1) “Qualified residential real property” means any residential real property that meets all of the following conditions: (A) No amount of property taxes levied on that property was delinquent at the close of the 1991–92 fiscal year. (B) The owner of the property suffered economic hardship as a result of the civil unrest that occurred in Los Angeles in April and May 1992. (C) The property is eligible for a homeowner’s exemption. (2) An owner shall be deemed to have suffered “economic hardship” if both of the following occur: (A) The owner signs a declaration under penalty of perjury under the laws of this state that he or she suffered economic hardship as a result of the civil unrest that occurred in Los Angeles in April and May 1992. (B) A business owned by the taxpayer, the taxpayer’s primary place of work, or the taxpayer’s residence that qualifies for the homeowner’s exemption is located in the area designated as the Los Angeles Revitalization Zone pursuant to Government Code Section 7102. (d) A claim for relief under this section shall be filed by an owner on a form and in the manner as the treasurer or tax collector shall prescribe. (e) The treasurer or tax collector shall permit any individual entitled to relief under this section who has paid any interest or penalties in connection with delinquent taxes levied for the 1992–93 fiscal year on qualified residential real property prior to filing a claim for relief to also file a claim for refund of the interest and penalties paid on a form and in the manner as the treasurer or tax collector shall prescribe. (Amended by Stats. 1995, Ch. 91, Sec. 153. Effective January 1, 1996.)
  42. 171.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.5. Disaster Relief [170 - 171.5] ( Chapter 2.5 added by Stats. 1979, Ch. 242. )

    Verify source ↗

    This section sets a special property-valuation rule for certain fire-damaged real property and defines when property qualifies for that relief.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.5. Disaster Relief [170 - 171.5] ( Chapter 2.5 added by Stats. 1979, Ch. 242. ) ## 171.5. (a) Notwithstanding Section 51, for purposes of determining the full cash value of qualified real property, the fair market value of that qualified real property on January 1, 2025, shall be its full cash value as of the date the property was damaged or destroyed, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value. (b) For purposes of this section, “qualified real property” shall mean real property impacted by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, for which the Governor proclaimed a state of emergency, if the sum of the full cash values of the land, improvements, and personality before the damage or destruction exceeds the sum of the values after the damage by ten thousand dollars ($10,000) or more, and if the property is not eligible for relief under Section 170. (Added by Stats. 2025, Ch. 530, Sec. 2. (AB 245) Effective October 10, 2025.)
  43. 17131.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says Part III of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code applies to items excluded from gross income, unless another rule provides otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131. Part III of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to items that are specifically excluded from gross income, shall apply, except as otherwise provided. (Amended by Stats. 2005, Ch. 691, Sec. 7. Effective October 7, 2005.)
  44. 17131.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain restitution payments and related interest received by an eligible individual, or the individual’s heirs or estate, are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.1. (a) Gross income does not include any excludable restitution payments received by an eligible individual (or the individual’s heirs or estate) and any excludable interest. (b) For purposes of this section: (1) The basis of any property received by an eligible individual (or the individual’s heirs or estate) as part of an excludable restitution payment shall be the fair market value of that property as of the time of the receipt. (2) “Eligible individual” means a person who was persecuted on the basis of race, religion, physical or mental disability, or sexual orientation by Nazi Germany, any other Axis regime, or any other Nazi-controlled or Nazi-allied country. (3) “Excludable restitution payment” means any payment or distribution to an individual (or the individual’s heirs or estate) that is any of the following: (A) Is payable by reason of the individual’s status as an eligible individual, including any amount payable by any foreign country, the United States of America, or any other foreign or domestic entity, or a fund established by any such country or entity, any amount payable as a result of a final resolution of a legal action, and any amount payable under a law providing for payments or restitution of property. (B) Constitutes the direct or indirect return of, or compensation or reparation for, assets stolen or hidden from, or otherwise lost to, the individual before, during, or immediately after World War II by reason of the individual’s status as an eligible individual, including any proceeds of insurance under policies issued on eligible individuals by European insurance companies immediately before and during World War II. (C) Consists of interest which is payable as part of any payment or distribution described in subparagraph (A) or (B). (4) “Excludable interest” means any interest earned by any of the following: (A) Escrow accounts or settlement funds established pursuant to the settlement of the action entitled “In re: Holocaust Victim Assets Litigation,” (E.D.N.Y.) C.A. No. 96-4849. (B) Funds to benefit eligible individuals or their heirs created by the International Commission on Holocaust Insurance Claims as a result of the Agreement between the Government of the United States of America and the Government of the Federal Republic of Germany concerning the Foundation “Remembrance, Responsibility, and Future,” dated July 17, 2000. (C) Similar funds subject to the administration of the United States courts created to provide excludable restitution payments to eligible individuals (or eligible individuals’ heirs or estates). (c) (1) This section shall apply to any amount received on or after January 1, 2000. (2) Nothing in this section shall be construed to create any inference with respect to the proper tax treatment of any amount received before January 1, 2000. (Added by Stats. 2002, Ch. 701, Sec. 2. Effective January 1, 2003.)
  45. 17131.10.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For tax purposes under this part, the September 9, 2010 San Bruno natural gas transmission line explosion is treated as a qualified disaster.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.10. Notwithstanding any other law, for purposes of this part, the natural gas transmission line explosion on September 9, 2010, in San Bruno, California, shall be treated as a qualified disaster within the meaning of Section 139 of the Internal Revenue Code. This section shall apply to payments made on or after September 9, 2010. (Added by Stats. 2011, Ch. 18, Sec. 1. (AB 50) Effective April 7, 2011.)
  46. 17131.11.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Section 4 of the Federal Disaster Tax Relief Act of 2023 does not apply to East Palestine disaster relief payments.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.11. Section 4 of the Federal Disaster Tax Relief Act of 2023 (Public Law 118-148), relating to East Palestine disaster relief payments, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 18. (SB 711) Effective October 1, 2025.)
  47. 17131.12.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Payments received by an individual from a qualifying guaranteed income pilot program are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.12. (a) Gross income does not include any payments received by an individual from a guaranteed income pilot program or project that receives a grant pursuant to Section 18997 of the Welfare and Institutions Code. (b) This section shall become inoperative on July 1, 2026, and, as of January 1, 2027, is repealed. (Added by Stats. 2022, Ch. 50, Sec. 12. (SB 187) Effective June 30, 2022. Inoperative July 1, 2026, by its own provisions. Repealed as of January 1, 2027, by its own provisions.)
  48. 17131.13.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A payment received by an individual under Welfare and Institutions Code Section 8257 is excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.13. Gross income does not include any payment received by an individual pursuant to Section 8257 of the Welfare and Institutions Code. (Added by Stats. 2023, Ch. 40, Sec. 21. (AB 129) Effective July 10, 2023.)
  49. 17131.14.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Payments received from the California Victim Compensation Board are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.14. Gross income does not include any payment received from the California Victim Compensation Board pursuant to Sections 13955 and 13970 of the Government Code. (Added by Stats. 2024, Ch. 119, Sec. 1. (AB 2979) Effective July 15, 2024.)
  50. 17131.15.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income excludes payments received by an individual under Welfare and Institutions Code Section 8161, and the section is scheduled to be repealed on January 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.15. (a) Gross income does not include any payments received by an individual pursuant to Section 8161 of the Welfare and Institutions Code. (b) This section shall remain in effect only until January 1, 2027, and as of that date is repealed. (Added by renumbering Section 17131.12 (as added by Stats. 2022, Ch. 51, Sec. 2) by Stats. 2023, Ch. 131, Sec. 209. (AB 1754) Effective January 1, 2024. Repealed as of January 1, 2027, by its own provisions.)
  51. 17131.16.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For eligible taxable years, this section excludes certain bill credits from gross income, and the section is set to repeal on December 1, 2026.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.16. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a customer from a community water system or wastewater treatment provider pursuant to the Water and Wastewater System Payments Under the American Rescue Plan Act of 2021 (Chapter 4.7 (commencing with Section 116773) of Part 12 of Division 104 of the Health and Safety Code). (b) This section shall remain in effect only until December 1, 2026, and as of that date is repealed. (Added by Stats. 2022, Ch. 3, Sec. 9. (SB 113) Effective February 9, 2022. Repealed as of December 1, 2026, by its own provisions.)
  52. 17131.17.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2021 and before January 1, 2026, certain CAPP bill credits received by a customer are excluded from gross income. The section sunsets on December 1, 2026.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.17. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a customer from a utility applicant under the California Arrearage Payment Program (CAPP), pursuant to the California Arrearage Payment Program Under the American Rescue Plan Act of 2021 (Article 12 (commencing with Section 16429.5) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code). (b) This section shall remain in effect only until December 1, 2026, and as of that date is repealed. (Added by Stats. 2022, Ch. 3, Sec. 10. (SB 113) Effective February 9, 2022. Repealed as of December 1, 2026, by its own provisions.)
  53. 17131.18.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    An individual’s gross income does not include payments received under Government Code Section 15990.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.18. Gross income does not include any payment received by an individual pursuant to Section 15990 of the Government Code. (Added by Stats. 2024, Ch. 266, Sec. 5. (AB 1878) Effective January 1, 2025.)
  54. 17131.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section excludes certain settlement payments and related interest from gross income for eligible individuals, and sets the basis of received property at fair market value when received.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.2. (a) Gross income does not include any excludable settlement payments received by an eligible individual (or the individual’s heirs or estate) and any excludable interest. (b) For purposes of this section: (1) The basis of any property received by an eligible individual (or the individual’s heirs or estate) as part of an excludable settlement payment shall be the fair market value of that property as of the time of the receipt. (2) “Eligible individual” means a person who was persecuted on the basis of race or religion by the regime that was in control of the Ottoman Turkish Empire from 1915 through 1923. (3) “Excludable settlement payment” means any payment or distribution to an individual (or the individual’s heirs or estate) that is any of the following: (A) Is payable by reason of the individual’s status as an eligible individual, including any amount payable by any foreign or domestic entity or a fund established by any entity, any amount payable as a result of a final resolution of a legal action, and any amount payable under a law providing for payments or restitution of property. (B) Constitutes compensation to the individual from 1915 until 1923, by reason of the individual’s status as an eligible individual, including any proceeds of insurance under policies issued on eligible individuals immediately before 1915 and during the time period from 1915 until 1923. (C) Consists of interest that is payable as part of any payment or distribution described in subparagraph (A) or (B). (4) “Excludable interest” means any interest earned by any of the following: (A) A fund to benefit eligible individuals or their heirs created by an international commission or an international organization. (B) A fund subject to the administration of the United States courts created to provide excludable settlement payments to eligible individuals (or eligible individuals’ heirs or estates). (c) (1) This section applies to any amount received on or after January 1, 2005. (2) This section may not be construed to create any inference with respect to the proper tax treatment of any amount received before January 1, 2005. (Added by Stats. 2004, Ch. 402, Sec. 2. Effective January 1, 2005.)
  55. 17131.20.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include certain bill credits received under the 2022 California Arrearage Payment Program for taxable years starting on or after January 1, 2022 and before January 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.20. (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include a bill credit or credits received by a customer from a utility applicant under the 2022 California Arrearage Payment Program, pursuant to Article 13 (commencing with Section 16429.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code. (b) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2022, Ch. 61, Sec. 12. (AB 205) Effective June 30, 2022. Repealed as of December 1, 2027, by its own provisions.)
  56. 17131.21.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For certain taxable years, this section excludes from gross income amounts tied to discharged unpaid community college fees, and the section is repealed on December 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.21. (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include any amount relating to the discharge of any unpaid fees due or owed by a student to a community college which was discharged pursuant to subparagraph (G) of paragraph (3) of subdivision (a) of Section 32527 of the Education Code. (b) (1) For the purposes of complying with Section 41, the Legislature finds and declares that the purpose of the exclusion allowed by this section is to provide financial relief to community college students affected by the adverse impacts of the economic disruptions and hardships resulting from the COVID-19 emergency. (2) The performance indicators used to determine whether the exclusion is achieving its stated purpose are the number of students that had fees discharged pursuant to subparagraph (G) of paragraph (3) of subdivision (a) of Section 32527 of the Education Code, and the total dollar value of those fees discharged. (3) The report required to be submitted by the Chancellor’s Office of the California Community Colleges to the Legislature, as required by paragraph (5) of subdivision (a) of Section 32527 of the Education Code, shall constitute reporting for the purpose of complying with Section 41. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2023, Ch. 5, Sec. 1. (AB 111) Effective May 15, 2023. Repealed as of December 1, 2027, by its own provisions.)
  57. 17131.22.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain emergency financial aid grants received by postsecondary students are excluded from gross income for the covered tax years, and the Legislative Analyst’s Office must report on the exclusion by November 1, 2028.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.22. (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2028, gross income does not include amounts of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, any of the following: (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Public Law 116-136). (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (3) Section 2003 of the American Rescue Plan Act of 2021 (Public Law 117-2). (b) (1) For purposes of complying with Section 41, as it pertains to this section, the Legislature finds and declares as follows: (A) The specific goal, purpose, and objective of the exclusion is to provide financial relief to recipients of specified pandemic relief funds. (B) The performance indicators for the Legislature to use in determining if the exclusion has achieved this goal shall be the number of taxpayers excluding specified pandemic relief from income based on this section, and the total dollar value of income so excluded. (2) The Legislative Analyst’s Office shall, no later than November 1, 2028, submit a report to the Legislature, in accordance with Section 9795 of the Government Code, that estimates the number of taxpayers with specified pandemic relief excluded from income, and estimates the total dollar value of the specified pandemic relief received, to the extent data is available. (c) This section shall remain in effect only until December 1, 2028, and as of that date is repealed. (Added by Stats. 2023, Ch. 5, Sec. 2. (AB 111) Effective May 15, 2023. Repealed as of December 1, 2028, by its own provisions.)
  58. 17131.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A qualifying grant is excluded from the taxpayer’s gross income and alternative minimum taxable income, but it must be counted when figuring the property’s basis, subject to a basis reduction rule.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.3. Any grant made in any taxable year by the Secretary of the Treasury under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 (Public Law 111-5) to a person that places in service specified energy property shall not be includable in the gross income or the alternative minimum taxable income of the taxpayer, but shall be taken into account in determining the basis of the property to which that grant relates, except that the basis of that property shall be reduced using rules prescribed under Section 50(c) of the Internal Revenue Code in the same manner as a credit allowed under Section 48(a) of the Internal Revenue Code, and adjusted in accordance with rules applied by the Secretary of the Treasury under Section 1603(f) of the American Recovery and Reinvestment Tax Act of 2009 (Public Law 111-5). (Added by Stats. 2010, Ch. 14, Sec. 11. (SB 401) Effective January 1, 2011.)
  59. 17131.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Two Internal Revenue Code provisions do not apply here: section 106(d) on health savings account contributions and section 106(g) on qualified small employer health reimbursement arrangements.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.4. (a) Section 106(d) of the Internal Revenue Code, relating to contributions to health savings accounts, shall not apply. (b) Section 106(g) of the Internal Revenue Code, relating to qualified small employer health reimbursement arrangement, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 16. (SB 711) Effective October 1, 2025.)
  60. 17131.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says the Internal Revenue Code provision on the health savings account exception does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.5. Section 125(d)(2)(D) of the Internal Revenue Code, relating to the exception for health savings accounts, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 7.6. Effective October 7, 2005.)
  61. 17131.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section changes how Section 107 of the Internal Revenue Code reads, replacing one rental-allowance phrase with a shorter one.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.6. Section 107 of the Internal Revenue Code is modified by substituting in paragraph (2) the phrase “the rental allowance paid to him or her as part of his or her compensation, to the extent used by him or her to rent or provide a home” in lieu of the phrase “the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities” contained therein. (Added by Stats. 2005, Ch. 691, Sec. 8. Effective October 7, 2005.)
  62. 17131.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2018, certain earned income is excluded from gross income for eligible taxpayers.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.7. (a) For taxable years beginning on or after January 1, 2018, gross income shall not include earned income of an eligible taxpayer. (b) For purposes of this section, the following definitions shall apply: (1) “Earned income” has the same meaning as provided in Section 32(c)(2) of the Internal Revenue Code, relating to earned income, as modified to substitute the phrase “but only if such amounts would have been otherwise properly includable in gross income for the taxable year without regard to subdivision (a) and only to the extent that the earned income is derived from sources within Indian country in this state” for the phrase “but only if such amounts are includable in gross income for the taxable year.” (2) “Eligible taxpayer” means an individual who is a member of a federally recognized Indian tribe in this state who resides within Indian country in this state. (3) “Indian country” has the same meaning as provided in Section 30101.7. (Added by Stats. 2018, Ch. 52, Sec. 4. (SB 855) Effective June 27, 2018.)
  63. 17131.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2019, certain forgiven covered loans and certain advance grant amounts are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.8. (a) For taxable years beginning on or after January 1, 2019, gross income does not include any covered loan amount forgiven pursuant to Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), pursuant to the Paycheck Protection Program and Health Care Enhancement Act (Public Law 116-139), pursuant to the Paycheck Protection Program Flexibility Act of 2020 (Public Law 116-142), pursuant to the Consolidated Appropriations Act, 2021 (Public Law 116-260), or pursuant to the PPP Extension Act of 2021 (Public Law 117-6). (b) For taxable years beginning on or after January 1, 2019, gross income does not include any advance grant amount issued pursuant to Section 1110(e) of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), or pursuant to Section 331 of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (c) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, subsection (a) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided. (2) Paragraph (1) of subsection (a) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986” with “For purposes of this part.” (3) The provisions of paragraph (1) of subsection (a) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260), relating to paragraphs (2) and (3) of subsection (i) of Section 7A of the Small Business Act, shall not apply to an ineligible entity. (4) Paragraph (2) of subsection (a) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall not apply. (d) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, subsection (b) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided. (2) Subsection (b) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986, in the case of any taxable year ending after the date of the enactment of this Act” with “For purposes of this part.” (3) Paragraphs (2) and (3) of subsection (b) of Section 276 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall not apply to an ineligible entity. (e) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, subsection (a) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided. (2) Subsection (a) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986” with “For purposes of this part.” (3) Paragraphs (2) and (3) of subsection (a) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall not apply to an ineligible entity. (f) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, subsection (b) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided. (2) Subsection (b) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986” with “For purposes of this part.” (g) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, Section 304(a) of Title III of Division N of the Consolidated Appropriations Act, 2021 (Public law 116-260) shall apply, except as provided. (h) For purposes of this section, all of the following definitions shall apply: (1) “Covered loan” has the same meaning as in Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), or pursuant to the Consolidated Appropriations Act, 2021 (Public Law 116-260). (2) “Advance grant amount” means an emergency Economic Injury Disaster Loan grant pursuant to Section 1110(e) of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136), or a targeted Economic Injury Disaster Loan advance pursuant to Section 331 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (3) “Ineligible entity” means a taxpayer that either: (A) Is a publicly traded company. (B) Does not meet the reduction from the gross receipts requirements of Section 636(a)(37)(A)(iv)(bb) of Title 15 of the United States Code, as added by Section 311 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (4) “Publicly traded company” means a publicly traded entity as described in Section 342 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (i) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section. (j) The amendments made by the act adding this subdivision shall be operative for taxable years beginning on or after January 1, 2019. (k) The amendments made to this section by Chapter 55 of the Statutes of 2022 shall be operative for taxable years beginning on or after January 1, 2019. (Amended by Stats. 2025, Ch. 231, Sec. 17. (SB 711) Effective October 1, 2025. Operative in taxable years beginning on or after January 1, 2019, by Stats. 2022, Ch. 55.)
  64. 17131.9.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include supplementary payments received by an individual under Welfare and Institutions Code Section 12306.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17131.9. Gross income does not include any supplementary payment received by an individual pursuant to Section 12306.6 of the Welfare and Institutions Code. (Added by Stats. 2010, Ch. 725, Sec. 8. (AB 1612) Effective October 19, 2010. Note: See Sec. 32 of Ch. 725.)
  65. 17132.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2021, a nonresident alien excludes certain agent-made payments under Section 18537(c) from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.1. For taxable years beginning on or after January 1, 2021, a nonresident alien’s gross income does not include any payment made by an agent pursuant to subdivision (c) of Section 18537. (Amended by Stats. 2025, Ch. 73, Sec. 1. (AB 1518) Effective January 1, 2026.)
  66. 17132.10.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Qualified taxpayers may exclude certain Survivor Benefit Plan annuity payments from gross income, up to $20,000, for taxable years starting after January 1, 2025 and before January 1, 2030.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.10. (a) For taxable years beginning on or after January 1, 2025, and before January 1, 2030, gross income shall not include annuity payments received by a qualified taxpayer during the taxable year, not to exceed twenty thousand dollars ($20,000), pursuant to a United States Department of Defense Survivor Benefit Plan. (b) For purposes of this section, the following definitions apply: (1) “Qualified taxpayer” means the surviving spouse or other named beneficiary of a plan who satisfies either of the following: (A) In the case of a surviving spouse or spouses filing a joint return, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed two hundred fifty thousand dollars ($250,000). (B) In the case of any other individual, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed one hundred twenty-five thousand dollars ($125,000). (2) “United States Department of Defense Survivor Benefit Plan” or “plan” means a survivor benefit plan established pursuant to Sections 1447 to 1455, inclusive, of Title 10 of the United States Code. (c) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Added by Stats. 2025, Ch. 17, Sec. 13. (SB 132) Effective June 27, 2025. Repealed as of December 1, 2030, by its own provisions.)
  67. 17132.11.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain federal education loan amounts are excluded from gross income for specified taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.11. (a) For taxable years beginning on or after January 1, 2014, gross income shall not include any loan amount repaid by the United States Secretary of Education or canceled pursuant to Section 1098e of Title 20 of the United States Code relating to income-based repayment. (b) For taxable years beginning on or after January 1, 2017, and before January 1, 2022, gross income shall not include any loan amount repaid by the United States Secretary of Education or canceled pursuant to Section 1087e(e) of Title 20 of the United States Code relating to income-contingent repayment. (Amended by Stats. 2018, Ch. 92, Sec. 193. (SB 1289) Effective January 1, 2019.)
  68. 17132.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years from 2026 through 2030, certain payments under Internal Revenue Code Sections 6417 and 6418 are excluded from gross income, and no deduction is allowed for amounts paid for a Section 6418 transfer.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.3. (a) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, gross income does not include any payment made pursuant to Section 6417 of the Internal Revenue Code, as added by Public Law 117-169, relating to elective payment of applicable credits. Sections 6417(c)(1)(C) and 6417(c)(1)(D) of the Internal Revenue Code, as added by Public Law 117-169, shall apply. (b) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, gross income does not include any payment made pursuant to Section 6418 of the Internal Revenue Code, as added by Public Law 117-169, relating to transfer of certain credits. (1) Sections 6418(c)(1)(A) and 6418(c)(1)(B) of the Internal Revenue Code, as added by Public Law 117-169, shall apply. (2) No deduction shall be allowed for any amount paid in consideration of a transfer made as described in Section 6418 of the Internal Revenue Code, as added by Public Law 117-169. (c) For purposes of this section, “payment made pursuant to Section 6418 of the Internal Revenue Code” includes the value of a credit received by a transferee pursuant to Section 6418 of the Internal Revenue Code, as added by Public Law 117-169. (d) (1) For purposes of complying with Section 41, for this section and Section 24310.5, the Legislature finds and declares all of the following: (A) The goal, purpose, and objective of the conformity to the exclusion and deduction provisions of Sections 6417 and 6418 of the Internal Revenue Code is to promote the investment and construction of clean energy projects and clean energy advanced manufacturing facilities in California. (B) The performance indicators to measure whether the conformity meets the goal, purpose, and objective stated in subparagraph (A) are data from taxpayers utilizing credits under Sections 6417 and 6418 of the Internal Revenue Code filing in California. (2) To assist the Legislature in determining whether the conformity fulfills the goal, purpose, and objective stated in subparagraph (A) of paragraph (1), the Franchise Tax Board shall report to the Legislature regarding the data described in subparagraph (B) of paragraph (1) on or before November 1, 2029, in compliance with Section 9795 of the Government Code. (e) This section shall remain in effect only until December 1, 2031, and as of that date is repealed. (Added by Stats. 2025, Ch. 215, Sec. 2. (SB 302) Effective October 1, 2025. Repealed as of December 1, 2031, by its own provisions.)
  69. 17132.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2005, death benefits received by an eligible individual are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.4. (a) For taxable years beginning on or after January 1, 2005, gross income does not include the death benefits received by an eligible individual. (b) For purposes of this section: (1) “Death benefit” means the entire amount of the death benefit payment made pursuant to Chapter 3.5 (commencing with Section 850) of Division 4 of the Military and Veterans Code. (2) “Eligible individual” means the surviving spouse of, or a beneficiary designated by, any member of the California National Guard, State Guard, or Naval Militia who dies or is killed in the performance of duty, as provided in Section 850 of the Military and Veterans Code. (Amended by Stats. 2020, Ch. 97, Sec. 46. (AB 2193) Effective January 1, 2021.)
  70. 17132.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section modifies how certain death-benefit exclusions under Section 101 of the Internal Revenue Code apply, including public safety officer survivor benefits, astronaut death benefits, and employer-owned life insurance rules, with specific effective dates.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.5. Section 101 of the Internal Revenue Code, relating to certain death benefits, is modified as follows: (a) Section 101(h) of the Internal Revenue Code, relating to survivor benefits attributable to service by a public safety officer who is killed in the line of duty, is modified to apply to amounts received in taxable years beginning after December 31, 1996, with respect to individuals dying after December 31, 1996. (b) (1) Section 101 of the Internal Revenue Code, as modified by subdivision (a) is modified to additionally provide that Section 101(h) of the Internal Revenue Code shall not apply to survivor benefits attributable to service by a public safety officer who is killed in the line of duty with respect to deaths occurring before December 31, 1996, that would otherwise be eligible for exclusion pursuant to Section 101(h) of the Internal Revenue Code, as modified by Public Law 107-15. (2) The amendments made to this section by Chapter 691 of the Statutes of 2005 shall apply to amounts paid after December 31, 2001, with respect to deaths occurring on or before December 31, 1996. (c) (1) Section 101 of the Internal Revenue Code, as modified by subdivision (b), is modified to additionally provide that Section 101(i) of the Internal Revenue Code shall apply to any astronaut whose death occurs in the line of duty. (2) The amendments made to this section by Chapter 552 of the Statutes of 2004 shall apply to amounts received in taxable years beginning after December 31, 2002, with respect to deaths occurring after that date. (d) Section 101(j) of the Internal Revenue Code, relating to the treatment of certain employer-owned life insurance contracts, shall apply in accordance with the provisions of Section 863 of the Pension Protection Act of 2006 (Public Law 109-280), relating to effective dates, except that the phrase “January 1, 2010,” shall be substituted for “the date of the enactment of this Act” contained therein. (Amended by Stats. 2010, Ch. 14, Sec. 12. (SB 401) Effective January 1, 2011.)
  71. 17132.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A qualifying payment to an individual is treated as damages under federal tax rules for the listed California personal income tax provisions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.7. A payment under Section 103(c)(10) of the Ricky Ray Hemophilia Relief Fund Act of 1998 (Public Law 105-369) to an individual shall be treated for purposes of this part, Part 10.2 (commencing with Section 18401) and Part 11 (commencing with Section 23001) as damages described in Section 104(a)(2) of the Internal Revenue Code. (Added by renumbering Section 17132.6 (as added by Stats. 2002, Ch. 35) by Stats. 2002, Ch. 807, Sec. 4. Effective September 23, 2002.)
  72. 17132.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain payments received from Virginia Polytechnic Institute and State University are excluded from gross income if they come from the Hokie Spirit Memorial Fund and are paid for the April 16, 2007 events.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.8. (a) For purposes of this part, Part 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001), gross income shall not include any amount received from the Virginia Polytechnic Institute and State University, out of amounts transferred from the Hokie Spirit Memorial Fund established by the Virginia Tech Foundation, an organization organized and operated as described in Section 501(c)(3) of the Internal Revenue Code, if that amount is paid on account of the events on April 16, 2007, at that university. (b) This section shall apply without regard to taxable year. (Added by Stats. 2010, Ch. 14, Sec. 13. (SB 401) Effective January 1, 2011.)
  73. 17132.9.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain retirement pay is excluded from gross income for eligible taxpayers, subject to a $20,000 cap and income limits, for taxable years beginning in 2025 through 2029.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17132.9. (a) For taxable years beginning on or after January 1, 2025, and before January 1, 2030, gross income shall not include retirement pay received by a qualified taxpayer during the taxable year, not to exceed twenty thousand dollars ($20,000), from the federal government for service in the uniformed services. (b) For purposes of this section, the following definitions apply: (1) “Qualified taxpayer” means a taxpayer that satisfies either of the following: (A) In the case of a surviving spouse or spouses filing a joint return, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed two hundred fifty thousand dollars ($250,000). (B) In the case of any other individual, adjusted gross income, as required to be shown on the federal tax return for the same taxable year, does not exceed one hundred twenty-five thousand dollars ($125,000). (2) “Uniformed services” means the Armed Forces of the United States, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the United States Public Health Service, and the National Oceanic and Atmospheric Administration Commissioned Officer Corps. (c) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Added by Stats. 2025, Ch. 17, Sec. 12. (SB 132) Effective June 27, 2025. Repealed as of December 1, 2030, by its own provisions.)
  74. 17133.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This state may not tax income that includes interest on bonds issued by this state or a local government in this state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17133. Income which this state is prohibited from taxing includes interest on bonds issued by this state or a local government in this state, and the determination of whether a bond is issued by this state or a local government in this state shall be made without regard to (a) the source of payment of that bond or the security for that bond, public or private, and (b) whether or not public improvements are financed. If there is at any time following the original issuance of such a bond a separation in ownership between the bond and any right to receive interest on the bond (whether or not evidenced by a coupon), payments or accruals on that stripped bond and stripped coupon shall be treated in a manner consistent with Section 1286(d) of the Internal Revenue Code. (Amended by Stats. 1989, Ch. 1352, Sec. 26. Effective October 2, 1989. Applicable to taxable years beginning on or after January 1, 1989, by Sec. 172 of Ch. 1352.)
  75. 17133.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A specified exemption phrase in other laws does not exempt gain or loss from selling or transferring bonds from this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17133.5. The following phrase (or its substantial equivalent) in other codes or statutes does not exempt the gain or loss from the sale or transfer of bonds from the provisions of this part: “The issuance, transfer and interest income earned on any bonds issued by an agency (state or local) under this article (chapter, section, etc.) is exempt from taxation of every kind by any state or local entity.” (Added by Stats. 1986, Ch. 317, Sec. 1. Effective July 15, 1986.)
  76. 17134.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A loan under the California State University Forgivable Loan Program is treated as a student loan for federal tax purposes, and a discharge tied to the borrower’s service for California State University is covered by Section 108(f)(1).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17134. Any loan made pursuant to the Forgivable Loan Program of the California State University shall be deemed to be a student loan within the meaning of Section 108(f)(2) of the Internal Revenue Code, and Section 108(f)(1) shall apply to any discharge of the loan that is made in connection with the borrower’s performance of services for the California State University. (Added by Stats. 1997, Ch. 228, Sec. 1. Effective August 5, 1997.)
  77. 17135.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    The use of an automobile by a special agent of federal or state taxing agencies must be treated under Section 1567 of Public Law 99-514.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17135. The use of an automobile by a special agent of federal or state taxing agencies shall be treated in the manner provided for by Section 1567 of Public Law 99-514. (Added by Stats. 1987, Ch. 1138, Sec. 56. Effective September 25, 1987. Applicable to taxable years beginning on or after January 1, 1987, by Sec. 189 of Ch. 1138.)
  78. 17135.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain forest landowner cost-share payments are excluded from gross income, and excluded amounts cannot be used to determine property basis or allowable deductions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17135.5. (a) Gross income does not include cost-share payments received by forest landowners from the Department of Forestry and Fire Protection pursuant to the California Forest Improvement Act of 1978 (Part 2.5 (commencing with Section 4790) of Division 1 of the Public Resources Code) or from the United States Department of Agriculture, Forest Service, under the Forest Stewardship Program and the Stewardship Incentives Program, pursuant to the Cooperative Forestry Assistance Act, as amended (Public Law 101-624). (b) The amount of any cost-share payment excluded pursuant to subdivision (a) shall not be considered with regard to either of the following: (1) Determining the basis of property acquired or improved. (2) Computing any allowable deduction to which the taxpayer may otherwise be entitled. (Added by Stats. 1994, Ch. 22, Sec. 1. Effective March 25, 1994.)
  79. 17136.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says Section 1078 of Public Law 98-369 applies, but Section 1078(f)(2) does not.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17136. Section 1078 of Public Law 98-369 (Tax Reform Act of 1984), relating to exclusions from gross income of payments from the United States Forest Service as a result of restricting motorized traffic in the Boundary Waters Canoe Area, shall apply, with the following exceptions: (a) Section 1078(f)(2) of that act shall not be applicable. (b) This section shall be effective only for payments made in taxable years beginning on or after January 1, 1985. (Added by Stats. 1985, Ch. 1461, Sec. 14. Effective October 1, 1985.)
  80. 17138.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A rebate or voucher from a local water or energy agency or supplier for qualifying purchase or installation expenses is treated as a refund or price adjustment.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138. Any amount received as a rebate or voucher from a local water or energy agency or supplier for any expenses the taxpayer paid or incurred for the purchase or installation of any of the following devices shall be treated as a refund or price adjustment of amounts payable to that water or energy agency or supplier: (a) A water conservation water closet that meets the performance standards of American National Standards Institute Standard A112.19.2 and uses no more than 1.6 gallons per flush, or for the installation of a urinal that meets the performance standards of American National Standards Institute Standard A112.19.2 and uses no more than one gallon per flush. (b) A water and energy efficient clothes washer that meets a 1.04 modified energy factor and 9.5 water use efficiency factor as determined by the State Energy Resources and Conservation Commission. (c) A plumbing device necessary to serve the recycled water uses described in Sections 13553 and 13554 of the Water Code. (Amended by Stats. 2001, Ch. 212, Sec. 1. Effective August 31, 2001.)
  81. 17138.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain rebates, vouchers, or other energy-related financial incentives are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.1. Gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by the California Energy Commission, the Public Utility Commission, or a local publicly owned electric utility, as defined in subdivision (d) of Section 9604 of the Public Utilities Code, for any expenses paid or incurred by a taxpayer for the purchase or installation of any of the following devices: (a) A thermal system as defined in Section 25600 of the Public Resources Code. (b) A solar system as defined in Section 25600 of the Public Resources Code. (c) A wind energy system device that produces electricity. (d) A fuel cell generating system, as described in the California Energy Commission’s Emerging Renewable Resources Account Guidebook, that produces electricity. (Added by Stats. 2002, Ch. 843, Sec. 1. Effective September 24, 2002.)
  82. 17138.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain turf replacement water conservation program incentives are excluded from gross income for eligible taxable years, and the section is set to repeal on December 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.2. (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by a public water system, local government, or state agency for participation in a turf replacement water conservation program. (b) For the purposes of this section, “public water system” shall have the same meaning as in Section 116275 of the Health and Safety Code. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2022, Ch. 674, Sec. 1. (AB 2142) Effective September 28, 2022. Repealed as of December 1, 2027, by its own provisions.)
  83. 17138.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain earthquake-loss-mitigation assistance payments are excluded from gross income for taxable years beginning on or after July 1, 2015.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.3. (a) For each taxable year beginning on or after July 1, 2015, gross income does not include an amount received as a loan forgiveness, grant, credit, rebate, voucher, or other financial incentive issued by the California Residential Mitigation Program or the California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligations incurred, for earthquake loss mitigation. (b) For the purposes of this section, “earthquake loss mitigation” means an activity that reduces seismic risks to a residential structure or its contents, or both. For purposes of structural seismic risk mitigation, a residential structure is either of the following: (1) A structure described in subdivision (a) of Section 10087 of the Insurance Code. (2) A residential building of not fewer than 2, but not more than 10, dwelling units. (Amended by Stats. 2015, Ch. 323, Sec. 10. (SB 102) Effective September 22, 2015.)
  84. 17138.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain qualified amounts received by a qualified taxpayer are excluded from gross income, and specified payors must give the Franchise Tax Board an annual list of payments on request.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.4. (a) Gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) The term “qualified amount” includes any of the following: (A) Amounts received by a qualified taxpayer during the remediation of the Carousel Housing Tract, located in Carson, California, from the Shell Oil Company for costs associated with temporary accommodations and relocation pursuant to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046. These costs include all amounts paid under the Temporary Living Assistance section of the Revised Remedial Action Plan, Relocation Plan, developed by URS Corporation for Shell Oil Products U.S., dated September 19, 2014. (B) Amounts received by a qualified taxpayer paid under the Optional Real Estate Program of the Revised Remedial Action Plan, Relocation Plan, developed by URS Corporation for Shell Oil Products U.S., dated September 19, 2014. (C) Any amounts received by a qualified taxpayer from a settlement arising out of the investigation, cleanup, or abatement of the waste discharged at the former Kast Property Tank Farm facility pursuant to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046. (2) The term “qualified amount” does not include any reimbursed amounts representing any expenses related to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046 that were deducted under this part. (c) For purposes of this section, “qualified taxpayer” means either of the following: (1) Any taxpayer that currently owns or previously owned real property located within the Carousel Housing Tract, located in Carson, California, who received amounts, incurred expenses, or received amounts from a settlement arising out of or pursuant to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046. (2) Any taxpayer that currently resides or previously resided within the Carousel Housing Tract, located in Carson, California, who received amounts, incurred expenses, or received amounts from a settlement arising out of or pursuant to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046. (d) The payor under the Revised Remedial Action Plan, Relocation Plan, developed by URS Corporation for Shell Oil Products U.S., dated September 19, 2014, and the payor or payors of the settlement proceeds arising out of or pursuant to California Regional Water Quality Control Board, Los Angeles Region Order R4-2011-0046, shall provide, upon request by the Franchise Tax Board, an annual list of names, addresses, payment dates, and amounts paid to qualified taxpayers. (e) (1) This section shall apply to taxable years beginning before, on, or after the effective date of the act adding this section. (2) If the credit or refund of any overpayment of tax resulting from the application of this section to a period before the effective date of this section is prevented as of such date by the operation of any law or rule of law, including res judicata, such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the one-year period beginning on the effective date of the act adding this section. (Added by Stats. 2018, Ch. 887, Sec. 2. (SB 343) Effective September 28, 2018.)
  85. 17138.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain settlement payments received by qualified taxpayers are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.5. (a) Gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from the Fire Victims Trust, established pursuant to the order of the United States Bankruptcy Court for the Northern District of California dated June 20, 2020, case number 19-30088, docket number 8053. (2) “Qualified taxpayer” means any of the following: (A) (i) Any taxpayer that owned real property located in the County of Amador or Calaveras during the 2015 Butte Fire who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to the 2015 Butte Fire. (ii) Any taxpayer that resided within the County of Amador or Calaveras during the 2015 Butte Fire who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to the 2015 Butte Fire. (B) (i) Any taxpayer that owned real property located in the County of Napa, Sonoma, Lake, Butte, Mendocino, or Solano during the 2017 North Bay Fires who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to one or more of the 2017 North Bay Fires. (ii) Any taxpayer that resided within the County of Napa, Sonoma, Lake, Butte, Mendocino, or Solano during the 2017 North Bay Fires who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to one or more of the 2017 North Bay Fires. (C) (i) Any taxpayer that owned real property located in the County of Butte during the 2018 Camp Fire who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to the 2018 Camp Fire. (ii) Any taxpayer that resided within the County of Butte during the 2018 Camp Fire who incurred and paid expenses and received amounts from a settlement arising out of or pursuant to the 2018 Camp Fire. (c) The Fire Victims Trust, shall provide, upon request by the Franchise Tax Board, an annual list of names, addresses, payment dates, and qualified amounts paid to qualified taxpayers. (d) (1) This section shall apply to taxable years beginning before, on, or after the effective date of the act adding this section. (2) If the credit or refund of any overpayment of tax resulting from the application of this section to a period before the effective date of this section is prevented as of that date by the operation of any law or rule of law, including res judicata, that credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the one-year period beginning on the effective date of the act adding this section. (e) This section shall remain in effect only until January 1, 2028, and as of that date is repealed. (Added by Stats. 2022, Ch. 749, Sec. 2. (AB 1249) Effective September 29, 2022. Repealed as of January 1, 2028, by its own provisions.)
  86. 17138.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning before January 1, 2027, certain settlement amounts are excluded from gross income, and the settlement entity must provide documentation to the Franchise Tax Board on request.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.6. (a) For taxable years beginning before January 1, 2027, gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from Southern California Edison in settlement for claims relating to the 2017 Thomas Fire or the 2018 Woolsey Fire. (2) “Qualified taxpayer” means any of the following: (A) Any taxpayer that owned real property located in the County of Ventura or Santa Barbara during the 2017 Thomas Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2017 Thomas Fire. (B) Any taxpayer that resided within the County of Ventura or Santa Barbara during the 2017 Thomas Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2017 Thomas Fire. (C) Any taxpayer that had a place of business within the County of Ventura or Santa Barbara during the 2017 Thomas Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2017 Thomas Fire. (D) Any taxpayer that owned real property located in the County of Ventura or Los Angeles during the 2018 Woolsey Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2018 Woolsey Fire. (E) Any taxpayer that resided within the County of Ventura or Los Angeles during the 2018 Woolsey Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2018 Woolsey Fire. (F) Any taxpayer that had a place of business within the County of Ventura or Los Angeles during the 2018 Woolsey Fire who paid and incurred expenses and received amounts from a settlement arising out of or pursuant to the 2018 Woolsey Fire. (3) “Settlement entity” means the entity making the settlement payment to a qualified taxpayer as described in paragraph (2). (c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board. (d) (1) This section shall apply to taxable years beginning before, on, or after the effective date of the act adding this section. (2) If the credit or refund of any overpayment of tax resulting from the application of this section to a period before the effective date of this section is prevented as of that date by the operation of any law or rule of law, including res judicata, that credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the one-year period beginning on the effective date of the act adding this section. (e) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2022, Ch. 841, Sec. 2. (SB 1246) Effective September 29, 2022. Repealed as of December 1, 2027, by its own provisions.)
  87. 17138.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include qualified wildfire settlement amounts received by a qualified taxpayer during the specified taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.7. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2030, gross income shall not include any qualified amount received by a qualified taxpayer in the taxable year. (b) For purposes of this section, the following definitions shall apply: (1) “Qualified amount” means any amount received from a settlement entity by a qualified taxpayer in connection with a qualified wildfire disaster in California. (2) “Qualified taxpayer” means any of the following: (A) Any taxpayer who owns real property located in an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the qualified wildfire disaster. (B) Any taxpayer who resides within an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the qualified wildfire disaster. (C) Any taxpayer who has a place of business within an area damaged by a qualified wildfire disaster who paid or incurred expenses, and received qualified amounts from a settlement entity, arising out of or pursuant to the qualified wildfire disaster. (3) “Qualified wildfire disaster” means any disaster arising from a wildfire for which either the Governor has declared a state of emergency or the President of the United States has declared an emergency or major disaster as defined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. Sec. 5121 et seq.). (4) “Settlement entity” means an entity making a settlement payment of a qualified amount to a qualified taxpayer. (c) The settlement entity shall provide, upon request by the Franchise Tax Board or qualified taxpayer, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board or the qualified taxpayer. (d) The qualified taxpayer shall provide, upon request, all necessary information in the form and manner prescribed by the Franchise Tax Board. (e) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Amended by Stats. 2025, Ch. 112, Sec. 1. (SB 159) Effective September 17, 2025. Repealed as of December 1, 2030, by its own provisions.)
  88. 17138.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Qualified taxpayers may exclude California qualified wildfire loss mitigation payments from gross income for taxable years 2024 through 2028.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17138.8. (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income shall not include any amount received by a qualified taxpayer as a California qualified wildfire loss mitigation payment. (b) For purposes of this section, the following definitions apply: (1) “California qualified wildfire loss mitigation payment” means any amount which is received through the California Wildfire Mitigation Financial Assistance Program under Article 16.5 (commencing with Section 8654.2) of Chapter 7 of Division 1 of Title 2 of the Government Code for the benefit of a residential property owner or occupant with expenses paid, or obligations incurred, for wildfire loss mitigation. (2) “Qualified taxpayer” means a taxpayer that owns the structure for which a California qualified wildfire loss mitigation payment was received. (3) “Wildfire loss mitigation” means an activity that reduces wildfire risks to a residential structure or its contents, or both. (c) (1) For the purpose of complying with Section 41, as it relates to the tax exclusion provided by this section and Section 24308.10, the Legislature finds and declares the following: (A) The specific goal, purpose, and objective of the tax exclusion is to provide relief to qualifying property owners in high fire areas who participate in the California Wildfire Mitigation Financial Assistance Program pursuant to Section 8654.2 of the Government Code. (B) The performance indicators for the Legislature to use in determining if the exclusion achieves the stated goal, purpose, and objective shall be the number of qualified taxpayers that may be eligible to exclude qualified amounts from gross income, and the aggregate amount of funds distributed from the California Wildfire Mitigation Financial Assistance Program. (2) (A) No later than December 1, 2029, the joint powers authority created pursuant to Section 8654.4 of the Government Code shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing, to the extent data is available, the aggregate amount of funds distributed from the California Wildfire Mitigation Financial Assistance Program, and the number of individuals who accepted funds from the program who may be eligible to exclude the income pursuant to this section and Section 24308.10. (B) Notwithstanding Section 19542, the Franchise Tax Board may provide data related to amounts excluded from gross income pursuant to this section and Section 24308.10, requested by the joint powers authority, to the extent that data is available. Taxpayer information received by the joint powers authority pursuant to this section is subject to Section 19542. (d) This section shall remain in effect only until December 1, 2029, and as of that date is repealed. (Added by Stats. 2024, Ch. 987, Sec. 1. (SB 946) Effective September 29, 2024. Repealed as of December 1, 2029, by its own provisions.)
  89. 17139.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Qualified taxpayers may exclude certain Kincade Fire settlement amounts from gross income for taxable years 2020 through 2027, and the settlement entity must provide documentation to the Franchise Tax Board on request.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17139.2. (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2028, gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from a settlement entity in connection with the 2019 Kincade Fire. (2) “Qualified taxpayer” means any of the following: (A) Any taxpayer that owned real property located in the County of Sonoma during the 2019 Kincade Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire. (B) Any taxpayer that resided within the County of Sonoma during the 2019 Kincade Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2019 Kincade Fire. (C) Any taxpayer that had a place of business within the County of Sonoma during the 2019 Kincade Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the Kincade Fire. (3) “Settlement entity” means Pacific Gas and Electric Company or its subsidiary that is making the settlement payment to a qualified taxpayer. (c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board. (d) (1) For the purpose of complying with Section 41 in regards to the exclusion provided by this section and Section 24309.6, the Legislature finds and declares that the specific goal, purpose, and objective of the tax exclusion is to provide essential relief to individuals who have suffered injury, loss, inconvenience, and expenses resulting from the devastating 2019 Kincade Fire. (2) (A) On December 1, 2028, the Legislative Analyst’s Office shall deliver to the Legislature a written report that includes both of the following: (i) To the extent feasible, the estimated number of qualified taxpayers that excluded qualified amounts from gross income, as those terms are used in this section and Section 24309.6, as a result of the exclusion. (ii) The estimated aggregate amount of those settlement payments arising out of the 2019 Kincade Fire. (B) The report required by this paragraph shall be delivered to the Legislature in compliance with Section 9795 of the Government Code. (e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed. (Added by Stats. 2023, Ch. 55, Sec. 5. (SB 131) Effective July 10, 2023. Repealed as of December 1, 2028, by its own provisions.)
  90. 17139.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Qualified taxpayers can exclude certain settlement amounts tied to the 2020 Zogg Fire from gross income for taxable years beginning on or after January 1, 2020 and before January 1, 2028.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17139.3. (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2028, gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) “Qualified amount” means any amount received in settlement by a qualified taxpayer from a settlement entity in connection with the 2020 Zogg Fire. (2) “Qualified taxpayer” means any of the following: (A) Any taxpayer that owned real property located in the County of Shasta or the County of Tehama during the 2020 Zogg Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2020 Zogg Fire. (B) Any taxpayer that resided within the County of Shasta or the County of Tehama during the 2020 Zogg Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2020 Zogg Fire. (C) Any taxpayer that had a place of business within the County of Shasta or the County of Tehama during the 2020 Zogg Fire who paid or incurred expenses and received amounts from a settlement arising out of or pursuant to the 2020 Zogg Fire. (3) “Settlement entity” means Pacific Gas and Electric Company or its subsidiary that is making the settlement payment to a qualified taxpayer. (c) The settlement entity shall provide, upon request by the Franchise Tax Board, documentation of the settlement payments in the form and manner requested by the Franchise Tax Board. (d) (1) For the purpose of complying with Section 41 in regards to the exclusion provided by this section and Section 24309.7, the Legislature finds and declares that the specific goal, purpose, and objective of the tax exclusion is to provide essential relief to individuals who have suffered injury, loss, inconvenience, and expenses resulting from the devastating 2020 Zogg Fire. (2) (A) On December 1, 2028, the Legislative Analyst’s Office shall deliver to the Legislature a written report that includes both of the following: (i) To the extent feasible, the estimated number of qualified taxpayers that excluded qualified amounts from gross income, as those terms are used in this section and Section 24309.7, as a result of the exclusion. (ii) The estimated aggregate amount of those settlement payments arising out of the 2020 Zogg Fire. (B) The report required by this paragraph shall be delivered to the Legislature in compliance with Section 9795 of the Government Code. (e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed. (Added by Stats. 2023, Ch. 55, Sec. 6. (SB 131) Effective July 10, 2023. Repealed as of December 1, 2028, by its own provisions.)
  91. 17139.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain taxpayers may exclude refund-related interest from gross income if they could not deduct the vehicle smog impact fee when it was paid or incurred.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17139.5. For taxpayers who were not allowed to deduct the vehicle smog impact fee imposed by Section 6262 when paid or incurred, any interest paid by this state in conjunction with the refund of the smog impact fee shall be excluded from gross income. (Added by Stats. 2000, Ch. 31, Sec. 2. Effective June 8, 2000.)
  92. 17139.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Section 139A of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17139.6. Section 139A of the Internal Revenue Code, relating to federal subsidies for prescription drug plans, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 12. Effective October 7, 2005.)
  93. 17140.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section excludes certain Scholarshare trust distributions and contributions from gross income for beneficiaries and participants, but later rules make some distributions and contributions taxable under specified conditions and years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17140. (a) For purposes of this section, the following terms have the following meanings as provided in the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of the Education Code): (1) “Beneficiary” has the meaning set forth in subdivision (c) of Section 69980 of the Education Code. (2) “Benefit” has the meaning set forth in subdivision (d) of Section 69980 of the Education Code. (3) “Participant” has the meaning set forth in subdivision (h) of Section 69980 of the Education Code. (4) “Participation agreement” has the meaning set forth in subdivision (i) of Section 69980 of the Education Code. (5) “Scholarshare trust” has the meaning set forth in subdivision (f) of Section 69980 of the Education Code. (b) For taxable years beginning on or after January 1, 1998, and before January 1, 2002, except as otherwise provided in subdivision (c), gross income of a beneficiary or a participant does not include any of the following: (1) Any distribution or earnings under a Scholarshare trust participation agreement, as provided in Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of the Education Code. (2) Any contribution to the Scholarshare trust on behalf of a beneficiary shall not be includable as gross income of that beneficiary. (c) For taxable years beginning on or after January 1, 1998, and before January 1, 2002: (1) Any distribution under a Scholarshare trust participation agreement shall be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code, as modified by Section 17085, to the extent not excluded from gross income under this part. For purposes of applying Section 72 of the Internal Revenue Code, the following apply: (A) All Scholarshare trust accounts of which an individual is a beneficiary shall be treated as one account, except as otherwise provided. (B) All distributions during a taxable year shall be treated as one distribution. (C) The value of the participation agreement, income on the participation agreement, and investment in the participation agreement shall be computed as of the close of the calendar year in which the taxable year begins. (2) A contribution by a for-profit or nonprofit entity, or by a state or local government agency, for the benefit of an owner or employee of that entity or a beneficiary whom the owner or employee has the power to designate, including the owner or employee’s minor children, shall be included in the gross income of that owner or employee in the year the contribution is made. (3) For purposes of this subdivision, “distribution” includes any benefit furnished to a beneficiary under a participation agreement, as provided in Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of the Education Code. (4) (A) Paragraph (1) shall not apply to that portion of any distribution that, within 60 days of distribution, is transferred to the credit of another beneficiary under the Scholarshare trust who is a “member of the family,” as that term is used in Section 529(e)(2) of the Internal Revenue Code, as amended by Section 211 of the Taxpayer Relief Act of 1997 (Public Law 105-34), of the former beneficiary of that Scholarshare trust. (B) Any change in the beneficiary of an interest in the Scholarshare trust shall not be treated as a distribution for purposes of paragraph (1) if the new beneficiary is a “member of the family,” as that term is used in Section 529(e)(2) of the Internal Revenue Code, as amended by Section 211 of the Taxpayer Relief Act of 1997 (Public Law 105-34), of the former beneficiary of that Scholarshare trust. (d) For taxable years beginning on or after January 1, 2002, Sections 529(c) and 529(e) of the Internal Revenue Code, relating to tax treatment of designated beneficiaries and contributors and to other definitions and special rules, respectively, shall apply, except as otherwise provided in Part 11 (commencing with Section 23001) and this part. (e) (1) The amendments made by Section 302(a)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(e) of the Internal Revenue Code, relating to other definitions and special rules, shall apply except as otherwise provided. (2) The amendments made by Section 302(b)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(c)(3) of the Internal Revenue Code, relating to distributions, shall apply, except as otherwise provided. (3) The amendments made by Section 302(c)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(c)(3)(D) of the Internal Revenue Code, relating to special rule for contributions of refunded amounts, shall apply, except as otherwise provided. (f) (1) The amendments made by Section 11025(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(c)(3)(C) of the Internal Revenue Code, relating to change in beneficiaries or programs, shall apply, except as otherwise provided. (2) (A) The amendments made by Section 11032(a)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(c) of the Internal Revenue Code, relating to tax treatment of designated beneficiaries and contributors, shall not apply, except as otherwise provided. (B) The amendments made by Section 11032(a)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(e)(3)(A) of the Internal Revenue Code, relating to qualified higher education expenses, shall not apply, except as otherwise provided. (C) In the case of any distribution made under Section 529(e)(3)(A) of the Internal Revenue Code, as amended by Section 11032(a)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), that would be treated for federal income tax purposes as a “qualified higher education expense” under Section 529(c)(7) of the Internal Revenue Code, as added by Section 11032(a)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), the amount of that distribution shall, notwithstanding anything in Section 529 of the Internal Revenue Code to the contrary, be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code. (D) Any distribution includable in the gross income of a distributee under subparagraph (C) shall not affect the exempt status of the qualified tuition program under Section 529 of the Internal Revenue Code for purposes of this part. (g) (1) For taxable years beginning on or after January 1, 2021, the amendments made by Section 302(a) of Division O of the Further Consolidated Appropriations Act, 2020 (Public Law 116-94) to Section 529(c)(8) of the Internal Revenue Code, relating to distributions for certain expenses associated with registered apprenticeship programs, shall apply. (2) For taxable years beginning on or after January 1, 2021, the amendments made by Section 302(b)(1) of Division O of the Further Consolidated Appropriations Act, 2020 (Public Law 116-94) to Section 529(c)(9) of the Internal Revenue Code, relating to distributions for qualified education loan repayments, shall apply. (h) (1) Section 529(c)(3)(E) of the Internal Revenue Code, relating to special rollovers to Roth IRAs from long-term qualified tuition programs, shall not apply. (2) In the case of any distribution made under Section 529(c)(3)(E) of the Internal Revenue Code, relating to the special rollover to Roth IRAs from long-term qualified tuition programs, treated for federal income tax purposes as a “qualified rollover contribution” under Section 408A(e)(1)(C) of the Internal Revenue Code, the amount of that distribution shall, notwithstanding Section 529 or Section 408A of the Internal Revenue Code to the contrary, be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code. (3) Any distribution includable in the gross income of a distributee under paragraph (2) shall not affect the exempt status of the qualified tuition program under Section 529 of the Internal Revenue Code for purposes of this part. (Amended by Stats. 2025, Ch. 231, Sec. 19. (SB 711) Effective October 1, 2025.)
  94. 17140.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section makes California’s tax rules track Section 529 of the Internal Revenue Code, with specific modifications and exceptions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17140.3. Section 529 of the Internal Revenue Code, relating to qualified state tuition programs, shall apply, except as otherwise provided. (a) Section 529(a) of the Internal Revenue Code is modified as follows: (1) By substituting the phrase “under this part and Part 11 (commencing with Section 23001)” in lieu of the phrase “under this subtitle.” (2) By substituting “Article 2 (commencing with Section 23731)” in lieu of “Section 511.” (b) A copy of the report required to be filed with the Secretary of the Treasury under Section 529(d) of the Internal Revenue Code shall be filed with the Franchise Tax Board at the same time and in the same manner as specified in that section. (c) (1) The amendments made by Section 302(a)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(e) of the Internal Revenue Code, relating to other definitions and special rules, shall apply except as otherwise provided. (2) The amendments made by Section 302(b)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(c)(3) of the Internal Revenue Code, relating to distributions, shall apply, except as otherwise provided. (3) The amendments made by Section 302(c)(1) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529(c)(3)(D) of the Internal Revenue Code, relating to special rule for contributions of refunded amounts, shall apply, except as otherwise provided. (d) (1) The amendments made by Section 11025(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(c)(3)(C) of the Internal Revenue Code, relating to change in beneficiaries or programs, shall apply, except as otherwise provided. (2) (A) The amendments made by Section 11032(a)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(c) of the Internal Revenue Code, relating to tax treatment of designated beneficiaries and contributors, shall not apply, except as otherwise provided. (B) The amendments made by Section 11032(a)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 529(e)(3)(A) of the Internal Revenue Code, relating to qualified higher education expenses, shall not apply, except as otherwise provided. (C) In the case of any distribution made under Section 529(e)(3)(A) of the Internal Revenue Code, as amended by Section 11032(a)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), that would be treated for federal income tax purposes as a “qualified higher education expense” under Section 529(c)(7) of the Internal Revenue Code, as added by Section 11032(a)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), the amount of that distribution shall, notwithstanding anything in Section 529 of the Internal Revenue Code to the contrary, be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code. (D) Any distribution includable in the gross income of a distributee under subparagraph (C) shall not affect the exempt status of the qualified tuition program under Section 529 of the Internal Revenue Code for purposes of this part. (e) (1) For taxable years beginning on or after January 1, 2021, the amendments made by Section 302(a) of Division O of the Further Consolidated Appropriations Act, 2020 (Public Law 116-94) to Section 529(c)(8) of the Internal Revenue Code, relating to distributions for certain expenses associated with registered apprenticeship programs, shall apply. (2) For taxable years beginning on or after January 1, 2021, the amendments made by Section 302(b)(1) of Division O of the Further Consolidated Appropriations Act, 2020 (Public Law 116-94) to Section 529(c)(9) of the Internal Revenue Code, relating to distributions for qualified education loan repayments, shall apply. (f) (1) Section 529(c)(3)(E) of the Internal Revenue Code, relating to special rollovers to Roth IRAs from long-term qualified tuition programs, shall not apply. (2) In the case of any distribution made under Section 529(c)(3)(E) of the Internal Revenue Code, relating to the special rollover to Roth IRAs from long-term qualified tuition programs, treated for federal income tax purposes as a “qualified rollover contribution” under Section 408A(e)(1)(C) of the Internal Revenue Code, the amount of that distribution shall, notwithstanding Section 529 or Section 408A of the Internal Revenue Code to the contrary, be includable in the gross income of the distributee in the manner as provided under Section 72 of the Internal Revenue Code. (3) Any distribution includable in the gross income of a distributee under paragraph (2) shall not affect the exempt status of the qualified tuition program under Section 529 of the Internal Revenue Code for purposes of this part. (Amended by Stats. 2025, Ch. 231, Sec. 20. (SB 711) Effective October 1, 2025.)
  95. 17140.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section makes California’s tax rules apply the federal ABLE program rules, with specified modifications, and requires reporting to the Franchise Tax Board and Legislature.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17140.4. For taxable years beginning on or after January 1, 2016, Section 529A of the Internal Revenue Code, relating to qualified ABLE programs, added by Section 102 of Division B of Public Law 113-295, shall apply, except as otherwise provided. (a) Section 529A(a) of the Internal Revenue Code is modified as follows: (1) By substituting the phrase “under this part and Part 11 (commencing with Section 23001)” in lieu of the phrase “under this subtitle.” (2) By substituting “Article 2 (commencing with Section 23731)” in lieu of “Section 511.” (b) Section 529A(c)(3)(A) of the Internal Revenue Code is modified by substituting “2.5 percent” in lieu of “10 percent.” (c) A copy of the report required to be filed with the Secretary of the Treasury under Section 529A(d) of the Internal Revenue Code, relating to reports, shall be filed with the Franchise Tax Board at the same time and in the same manner as specified in that section. (d) (1) The amendments made by Section 303(a) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 529A(b)(1) of the Internal Revenue Code, relating to qualified ABLE programs, shall apply, except as otherwise provided. (2) The amendments made by Section 303(b) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Sections 529A(d)(3) and 529A(e) of the Internal Revenue Code, relating to qualified ABLE programs shall apply, except as otherwise provided. (3) The amendments made by Section 303(c) of Division Q of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Sections 529A(d)(4) and 529A(c)(1)(C)(i) of the Internal Revenue Code, relating to qualified ABLE program, shall apply, except as otherwise provided. (e) The amendments made by Section 11024(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 529A(b)(2)(B) of the Internal Revenue Code, relating to qualified ABLE programs, shall apply, except as otherwise provided. (f) (1) For taxable years beginning on or after January 1, 2026, the amendments made by Section 124 of the Consolidated Appropriations Act, 2023 (Public Law 117-328) to Section 529A(e) of the Internal Revenue Code, relating to qualified ABLE programs, shall apply, except as otherwise provided. (2) (A) For the purpose of complying with Section 41, as it relates to the tax expenditures established by this subdivision and subdivision (f) of Section 23711.4 (hereafter the “tax expenditures,”) the Legislature finds and declares as follows: (i) The goal, purpose, and objective of the tax expenditures are to encourage and assist individuals and families to save private funds for purposes of supporting persons with disabilities to maintain their health, independent, and quality of life. (ii) The performance indicators for the Legislature to use in determining whether the tax expenditures are achieving their stated goal shall be the number of ABLE accounts that are created for individuals who are made newly eligible by the raised age limit. (B) No later than January 1, 2030, the Treasurer’s office shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of ABLE accounts that are created for individuals who are made newly eligible by the raised age limit. (Amended by Stats. 2023, Ch. 324, Sec. 1. (AB 339) Effective January 1, 2024.)
  96. 17140.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section gives special tax rules for servicemembers, including limits on residency treatment, income treatment, and interest on certain pre-service underpayments.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17140.5. (a) Pursuant to Section 206 of the Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 526), the period of a servicemember’s military service may not be included in computing any period limited by law, regulation, or order for the bringing of any action or proceeding under this part, Part 10.2 (commencing with Section 18401), or Part 11 (commencing with Section 23001), by or against the servicemember or the servicemember’s heirs, executors, administrators, or assigns. (b) Section 19521 is modified to provide that, pursuant to Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 527), the maximum rate of interest on any underpayment incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service may not bear interest at a rate in excess of 6 percent per year during the period of military service. (c) Pursuant to Section 511 of the Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 571): (1) A servicemember not domiciled in this state does not become a resident of this state by reason of being present in this state solely in compliance with military orders. (2) Compensation for military service of a servicemember not domiciled in this state is not income for services performed or from sources within this state. (3) The military compensation of a servicemember not domiciled in this state may not be used to increase the tax liability imposed on other income of that servicemember or that servicemember’s spouse. (4) A Native American servicemember whose legal residence or domicile is a federal Indian reservation shall be treated as living on the federal Indian reservation and the compensation of that servicemember for military service shall be deemed to be income derived wholly from federal Indian reservation sources. (d) For purposes of this part and Part 10.2 (commencing with Section 18401), in the case of a servicemember not domiciled in this state, all of the following shall apply: (1) Compensation for military service shall not be included in any of the following: (A) Gross income of that servicemember or the spouse of that servicemember. (B) “Entire taxable income” for purposes of computing the tax imposed under subdivision (b) or (d) of Section 17041. (C) “Alternative minimum taxable income” for purposes of computing tax imposed under subparagraph (B) of paragraph (3) of subdivision (b) of Section 17062. (2) Paragraph (2) of subdivision (h) of Section 17024.5 is modified to provide that references to “adjusted gross income” for purposes of computing limitations based upon adjusted gross income, shall mean the amount required to be shown as adjusted gross income on the federal tax return for the same taxable year reduced by the amount of the compensation for military service for that taxable year of a servicemember not domiciled in this state. (e) (1) “Federal Indian reservation,” “servicemember,” “military service,” “period of military service,” and “compensation for military service” shall have the same meanings as applicable for purposes of the Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 501 et seq.). (2) “Native American” has the same meaning as the term “Indian” for purposes of applying Section 511(e) of the Servicemembers Civil Relief Act (50 U.S.C. Appen. Sec. 571(e)) for federal purposes. (f) The amendments made to this section by the act adding this subdivision shall apply to any taxable year for which the period for making assessments or allowing a claim for refund or credit has not expired as of December 19, 2003. (Repealed and added by Stats. 2004, Ch. 388, Sec. 2. Effective September 9, 2004.)
  97. 17141.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include income derived from an obligation of a Community Energy Authority.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17141. Gross income does not include income derived from an obligation of a Community Energy Authority established under the provisions of Part 3 (commencing with Section 52000) of Division 1 of Title 5 of the Government Code. (Added by Stats. 1983, Ch. 498, Sec. 140. Effective July 28, 1983. Operative January 1, 1985, pursuant to Sec. 220 of Ch. 498.)
  98. 17141.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Amounts received as a premium assistance subsidy under the cited Government Code title are not included in gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17141.1. Gross income does not include any amounts received as a premium assistance subsidy under Title 25 (commencing with Section 100800) of the Government Code. (Added by Stats. 2019, Ch. 38, Sec. 36. (SB 78) Effective June 27, 2019.)
  99. 17141.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2023, certain HOPE trust account funds are excluded from gross income, and those funds are also not treated as earned income for specified tax credit eligibility.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17141.5. (a) Notwithstanding any other law or guidance, for taxable years beginning on or after January 1, 2023, gross income does not include either of the following: (1) Any funds deposited, any investment returns accrued, and any accrued interest in a trust account under the California Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Trust Account Act (Chapter 16.1 (commencing with Section 18997.5) of Part 6 of Division 9 of the Welfare and Institutions Code). (2) Any funds from the trust account described in paragraph (1) that is withdrawn or transferred by an eligible youth. (b) Notwithstanding any other law or guidance, for taxable years beginning on or after January 1, 2023, funds deposited, any investment returns accrued, and any accrued interest in a trust account under the California Hope, Opportunity, Perseverance, and Empowerment (HOPE) for Children Trust Account Act (Chapter 16.1 (commencing with Section 18997.5) of Part 6 of Division 9 of the Welfare and Institutions Code) and any funds from a trust account that is withdrawn or transferred by an eligible youth shall not be considered earned income for purposes of eligibility for the California Earned Income Tax Credit pursuant to Section 17052 and the Young Child Tax Credit pursuant to Section 17052.1. (Added by Stats. 2022, Ch. 569, Sec. 54. (AB 156) Effective September 27, 2022.)
  100. 17142.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Sections 111(b) and 111(c) of the Internal Revenue Code apply to credits allowed under this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17142. Sections 111(b) and 111(c) of the Internal Revenue Code, relating to credits and treatment of credit carryovers, shall be applicable with respect to credits allowable under this part. (Added by Stats. 1988, Ch. 1465, Sec. 5. Effective September 28, 1988. Applicable to taxable years beginning on or after January 1, 1988, by Sec. 77 of Ch. 1465.)
  101. 17142.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section defines when a place is treated as a “qualified hazardous duty area” for certain federal tax rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17142.5. (a) For purposes of the following provisions of the Internal Revenue Code, a qualified hazardous duty area shall be treated in the same manner as if it were a combat zone (as determined under Section 112 of the Internal Revenue Code): (1) Section 2 (a)(3) (relating to a special rule where a deceased spouse was in missing status). (2) Section 112 (relating to certain combat zone compensation of members of the Armed Forces). (3) Section 692 (relating to income taxes of members of Armed Forces upon death). (4) Section 7508 (relating to time for performing certain acts postponed by reason of service in combat zone). (b) “Qualified hazardous duty area” means Bosnia and Herzegovina, Croatia, or Macedonia, if, as of March 20, 1996, any member of the Armed Forces of the United States is entitled to special pay under Section 310 of Title 37 of the United States Code (relating to special pay; duty subject to hostile fire or imminent danger) for services performed in that country. “Qualified hazardous duty area” includes any country only during the period that entitlement is in effect. Solely for purposes of applying Section 7508 of the Internal Revenue Code, in the case of an individual who is performing services as part of Operation Joint Endeavor outside the United States while deployed away from the individual’s permanent duty station, the term “qualified hazardous duty area” includes, during the period for which that entitlement is in effect, any area in which those services are performed. (Amended by Stats. 1999, Ch. 987, Sec. 24. Effective October 10, 1999.)
  102. 17143.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    The referenced Internal Revenue Code sections on interest from governmental obligations do not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17143. Sections 103 and 141 to 150, inclusive, of the Internal Revenue Code, relating to interest on governmental obligations, shall not apply. (Amended by Stats. 1999, Ch. 987, Sec. 25. Effective October 10, 1999.)
  103. 17144.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section changes how certain federal income tax rules apply for California personal income tax, including limits on some Internal Revenue Code provisions and rules for a taxpayer’s election under Section 108(c).

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17144. (a) Section 108(b)(2)(B) of the Internal Revenue Code, relating to general business credit, is modified by substituting “this part” in lieu of “Section 38 (relating to general business credit).” (b) Section 108(b)(2)(G) of the Internal Revenue Code, relating to foreign tax credit carryovers, shall not apply. (c) Section 108(b)(3)(B) of the Internal Revenue Code, relating to credit carryover reduction, is modified by substituting “11.1 cents” in lieu of “331/3 cents” in each place in which it appears. In the case where more than one credit is allowable under this part, the credits shall be reduced on a pro rata basis. (d) Section 108(g)(3)(B) of the Internal Revenue Code, relating to adjusted tax attributes, is modified by substituting “($9)” in lieu of “($3).” (e) (1) If a taxpayer makes an election for federal income tax purposes under Section 108(c) of the Internal Revenue Code, relating to treatment of discharge of qualified real property business indebtedness, a separate election shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5 and the federal election shall be binding for purposes of this part. (2) If a taxpayer has not made an election for federal income tax purposes under Section 108(c) of the Internal Revenue Code, relating to treatment of discharge of qualified real property business indebtedness, then the taxpayer shall not be allowed to make that election for purposes of this part. (f) Section 108(i) of the Internal Revenue Code, relating to deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument, shall not apply. (Amended by Stats. 2015, Ch. 359, Sec. 10. (AB 154) Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  104. 17144.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section limits how much discharge-of-indebtedness income can be excluded from gross income, and says no penalties or interest are due for certain qualified principal residence debt discharges in specified tax years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17144.5. (a) (1) Section 108(a)(1)(E) of the Internal Revenue Code is modified to provide that the amount excluded from gross income shall not exceed five hundred thousand dollars ($500,000) (two hundred fifty thousand dollars ($250,000) in the case of a married individual filing a separate return). (2) Section 108(a)(1)(E) of the Internal Revenue Code is modified by substituting “before January 1, 2015,” in lieu of clauses (i) and (ii). (b) Section 108(h)(2) of the Internal Revenue Code is modified by substituting the phrase “(within the meaning of section 163(h)(3)(B), applied by substituting ‘$800,000 ($400,000’ for ‘$1,000,000 ($500,000’ in clause (ii) thereof)” for the phrase “(within the meaning of section 163(h)(3)(B), applied by substituting ‘$2,000,000 ($1,000,000’ for ‘$1,000,000 ($500,000’ in clause (ii) thereof)” contained therein. (c) This section shall apply to discharges of indebtedness occurring on or after January 1, 2007, and, notwithstanding any other law to the contrary, no penalties or interest shall be due with respect to the discharge of qualified principal residence indebtedness during the 2007 or 2009 taxable year regardless of whether or not the taxpayer reports the discharge on their return for the 2007 or 2009 taxable year. (d) The amendments made by Section 202 of the American Taxpayer Relief Act of 2012 (Public Law 112-240) to Section 108 of the Internal Revenue Code shall apply. (e) The changes made to this section by Section 1 of Chapter 152 of the Statutes of 2014 shall apply to discharges of indebtedness that occur on or after January 1, 2013, and before January 1, 2014, and, notwithstanding any other law, no penalties or interest shall be due with respect to the discharge of qualified principal residence indebtedness during the 2013 taxable year, regardless of whether the taxpayer reports the discharge on their income tax return for the 2013 taxable year. (Amended by Stats. 2025, Ch. 231, Sec. 21. (SB 711) Effective October 1, 2025.)
  105. 17144.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section applies and modifies federal income-tax exclusion rules for certain discharges, including student loan debt relief, and requires the Legislative Analyst’s Office to report by October 1, 2026.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17144.8. (a) Section 108(f)(5) of the Internal Revenue Code, relating to discharges on account of death or disability, as added by Section 11031(a) of the federal Tax Cuts and Jobs Act (Public Law 115-97), shall apply except as otherwise provided. (b) Section 108(f)(5)(A) of the Internal Revenue Code, as added by Section 11031(a) of the federal Tax Cuts and Jobs Act (Public Law 115-97), is modified by substituting the phrase “after December 31, 2018,” in lieu of the phrase “after December 31, 2017, and before January 1, 2026.” (c) (1) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, the amendments made by Section 9675(a) of the American Rescue Plan Act of 2021 (Public Law 117-2) to Section 108(f)(5) of the Internal Revenue Code, relating to the special rule for discharges in 2021 through 2025, shall apply. (2) (A) For purposes of complying with Section 41, as it pertains to this subdivision, the Legislature finds and declares as follows: (i) The specific goal, purpose, and objective of the exclusion is to provide financial relief to taxpayers with discharges of student loan debt. (ii) The performance indicators for the Legislature to use in determining if the exclusion has achieved this goal shall be the number of taxpayers excluding discharge of indebtedness income based on this subdivision, and the total dollar value of income so excluded. (B) The Legislative Analyst’s Office shall, no later than October 1, 2026, submit a report to the Legislature, in accordance with Section 9795 of the Government Code, that estimates the number of taxpayers with discharged student loan debt excluded from income, and estimates the total dollar value of the debt discharged, to the extent data is available. (Amended by Stats. 2024, Ch. 80, Sec. 120. (SB 1525) Effective January 1, 2025.)
  106. 17145.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A regulated investment company, or a series of one, may pay exempt-interest dividends if it holds enough qualifying obligations each quarter; recipients must treat those dividends as interest excludable from income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17145. (a) A regulated investment company, as defined in Section 851 of the Internal Revenue Code, relating to definition of regulated investment company, or series thereof, is qualified to pay exempt-interest dividends to its shareholders if, at the close of each quarter of its taxable year, at least 50 percent of the value of its total assets consists of obligations which, when held by an individual, the interest therefrom is exempt from taxation by this state. (b) For purposes of this section: (1) “Aggregate reported amount” means the aggregate amount of dividends reported by the company under paragraph (4) as exempt-interest dividends for the taxable year (including exempt-interest dividends paid after the close of the taxable year described in Section 855 of the Internal Revenue Code). (2) “Excess reported amount” means the excess of the aggregate reported amount over the exempt interest of the company for the taxable year. (3) “Exempt interest” means, with respect to any regulated investment company, the excess of the amount of interest received by it during its taxable year on obligations, interest on which, if held by an individual, is exempt from taxation by this state, over the amounts that, if it were treated as an individual, would be disallowed as deductions under Section 17280 of this part or Section 171(a)(2) of the Internal Revenue Code. (4) (A) Except as provided in subparagraph (B), “exempt-interest dividend” means any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company or series thereof and reported by the company as an exempt-interest dividend in written statements furnished to its shareholders. (B) If the aggregate reported amount with respect to the company for any taxable year exceeds the exempt interest of the company for such taxable year, an exempt-interest dividend is the excess of the reported exempt-interest dividend amount over the excess reported amount which is allocable to such reported exempt-interest dividend amount. (C) (i) Except as provided in clause (ii), the excess reported amount (if any) which is allocable to the reported exempt-interest dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported exempt-interest dividend amount bears to the aggregate reported amount. (ii) In the case of a taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, clause (i) shall be applied by substituting “post-December reported amount” for “aggregate reported amount” and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year. (5) “Post-December reported amount” means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year. (6) “Reported exempt-interest dividend amount” means the amount reported to its shareholders under paragraph (4) as an exempt-interest dividend. (7) “Series” means a segregated portfolio of assets, the beneficial interest in which is owned by the holders of a class or series of stock of the regulated investment company that is preferred over all other classes or series with respect to that portfolio of assets. (8) “Value” means, with respect to securities (other than those of majority-owned subsidiaries) for which market quotations are readily available, the market value of those securities; and with respect to other securities and assets, fair market value as determined in good faith by the board of directors or trustees, except that in the case of securities of majority-owned subsidiaries that are investment companies, as defined in the Investment Company Act of 1940, that fair value shall not exceed market value or asset value, whichever is higher. (c) An exempt-interest dividend shall be treated by recipients thereof as an item of interest excludable from income. (d) In the case of a qualified fund of funds, as defined in Section 852(g)(2) of the Internal Revenue Code, relating to fund of funds, that fund shall be qualified to pay tax-exempt dividends to its shareholders without regard to whether that fund satisfies the requirements of subdivision (a). (e) The amendments made to this section by the act adding this subdivision shall apply to taxable years beginning on or after December 23, 2010. (Amended by Stats. 2011, Ch. 490, Sec. 2. (AB 1423) Effective October 6, 2011.)
  107. 17146.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Compensation of employees of a foreign country must be determined under Section 893 of the Internal Revenue Code.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17146. The compensation of employees of a foreign country shall be determined in accordance with Section 893 of the Internal Revenue Code. (Repealed and added by Stats. 1983, Ch. 488, Sec. 26. Effective July 28, 1983.)
  108. 17147.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Reward income from an authorized crime hotline is excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17147.7. (a) Gross income does not include any income which is received as a reward from a crime hotline that is authorized by any governmental entity. (b) For the purposes of this section, “crime hotline” means any method of direct communication established by a government agency or a private, nonprofit organization exempt from taxation under Section 23701d for the purpose of permitting individuals to report criminal activity to that agency or organization, or any other designated government agency. (c) This section shall not apply to an employee of an agency or organization establishing or operating a crime hotline or to an employee of an organization that has contributed to the reward described in subdivision (a). (Added by Stats. 1994, Ch. 481, Sec. 1. Effective September 12, 1994.)
  109. 17149.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Employee ridesharing compensation is generally excluded from gross income, except salary or wages.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17149. (a) Gross income does not include compensation or the fair market value of any other benefit, except salary or wages, received by an employee from an employer for participation in any ridesharing arrangement in California, including those specified in subdivision (b). (b) For purposes of this section, compensation or the fair market value of any other benefit received for participation in a ridesharing arrangement in California includes compensation or other benefit received for: (1) Commuting in a vanpool. (2) Commuting in a private commuter bus or buspool. (3) A transit pass for use by the employee or his or her dependents, other than transit passes for use by elementary and secondary school students who are dependents of the employee. (4) Commuting in a subscription taxipool. (5) Commuting in a carpool. (6) Free or subsidized parking. (7) An employee’s bicycling to or from his or her place of employment. (8) Commuting by ferry. (9) The use of an alternative transportation method, other than a method otherwise specified in this subdivision, that reduces the use of a motor vehicle by a single occupant to travel to or from that individual’s place of employment. (10) Travel to or from a telecommuting facility. (c) For purposes of this section: (1) “Vanpool” means seven or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry 7 to 15 adults, including the driver, that is used to transport those persons who commute to and from work on a regular basis. (2) “Transit pass” means any purchase of transit rides that entitles the holder to any number of transit rides to and from the workplace, whether at a discount rate or the base fare rate. (3) “Transit” means transportation service for use by the general public that utilizes buses, railcars, or ferries with a seating capacity of 16 or more persons. (4) “Subscription taxipool” means a type of service in which employers or groups of employees contract with a public or private taxi operator to provide daily commuter service for a group of preassembled subscribers on a prepaid or daily fare basis following a relatively fixed route and schedule tailored to meet the needs of the subscribers. (5) “Ridesharing arrangement” means the transportation of persons in a motor vehicle where that transportation is incidental to another purpose of the driver. The term includes ridesharing arrangements known as carpools, vanpools, and buspools. (6) “Carpool” means two or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry less than seven adults, including the driver. (7) “Buspool” means 16 or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry more than 15 adult passengers. (8) “Private commuter bus” means a highway vehicle which meets all of the following criteria: (A) Has a seating capacity of at least seven adults, including the driver. (B) At least 50 percent of the mileage of which can be reasonably expected to be used for the purpose of transporting employees to and from work. (C) Is acquired by the taxpayer on or after the date of enactment of this section. (D) With respect to which the taxpayer makes an election under this paragraph on his or her return for the taxable year in which the vehicle is placed in service. (9) “Free or subsidized parking” means the benefit received from an employer for parking while participating in a ridesharing arrangement within California. (10) “Alternative commute program” means any alternative transportation method or program the purpose of which is to reduce the use of a motor vehicle by a single occupant to travel to and from that individual’s place of employment. (Amended by Stats. 1994, Ch. 622, Sec. 3. Effective January 1, 1995.)
  110. 17149.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Section 132(f)(8) of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17149.1. Section 132(f)(8) of the Internal Revenue Code, relating to suspension of qualified bicycle commuting reimbursement exclusion, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 22. (SB 711) Effective October 1, 2025.)
  111. 17149.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says Section 132(g)(2) of the Internal Revenue Code does not apply to qualified moving expense reimbursement for taxable years 2018 to 2025.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17149.2. Section 132(g)(2) of the Internal Revenue Code, relating to qualified moving expense reimbursement suspension for taxable years 2018 to 2025, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 23. (SB 711) Effective October 1, 2025.)
  112. 17151.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Employees may exclude up to $5,250 per year of qualifying employer-paid educational assistance from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17151. (a) Gross income of an employee does not include any amounts, not exceeding an aggregate amount of five thousand two hundred fifty dollars ($5,250) per calendar year, that is paid or incurred by the employer for educational assistance to the employee pursuant to an educational assistance program. (b) For purposes of this section, the following definitions shall apply: (1) “Educational assistance” means the payment by an employer of expenses incurred by or on behalf of an employee for the employee’s education, and includes, but is not limited to, payments for books, supplies, equipment, tuition, and fees, and similar payments. “Educational assistance” includes the provision by an employer of courses of instruction for an employee, including the provision of books, supplies, and equipment. “Educational assistance” does not include any payment for, or the provision of, any of the following: (A) Any tools or supplies that may be retained by the employee after completion of a course of instruction. (B) Any meals, lodging, or transportation. (C) Any course or education involving sports, games, or hobbies. (D) Any course or education taken at the graduate level of a kind normally taken by an individual pursuing a program leading to a law, business, medical, or other advanced academic or professional degree. This subparagraph applies only to any course or education taken at the graduate level beginning after June 30, 1996, and before January 1, 2000. (2) “Educational assistance program” means a separate written plan of an employer for the exclusive benefit of his or her employees to provide those employees with educational assistance. The program shall meet the following requirements: (A) The program benefits employees who qualify under a classification established by the employer and found by the Franchise Tax Board not to be discriminatory in favor of employees who are highly compensated employees (within the meaning of Section 414(q) of the Internal Revenue Code) or their dependents. For purposes of this subparagraph, there shall be excluded from consideration employees who are not included in the program and who are included in a unit of employees covered by an agreement that the Franchise Tax Board finds to be a collective bargaining agreement between employee representatives and one or more employers, if there is evidence that educational assistance benefits were the subject of good faith bargaining between the employee representatives and the employer or employers. (B) Not more than 5 percent of the amounts paid or incurred by the employer for educational assistance during the year may be provided for the class of individuals who are owners (or their spouses or dependents), each of whom, on any day of the year, owns more than 5 percent of the capital or profits interest in the employer. (C) The program does not provide eligible employees with a choice between educational assistance and other remuneration includable in gross income. For purposes of this section, the business practices of the employer, as well as the written program, shall be taken into account. (D) The program need not be funded. (E) Reasonable notification of the availability and terms of the program is provided to eligible employees. (3) “Employee” includes self-employed individuals within the meaning of Section 401(c)(1) of the Internal Revenue Code. (c) For purposes of this section: (1) Any individual who owns the entire interest in an unincorporated trade or business shall be treated as his or her own employee. (2) A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3) of subdivision (b). (3) (A) An educational assistance program shall not be considered to fail to meet any of the requirements of paragraph (2) of subdivision (b) on the sole basis of either of the following: (i) Different utilization rates for the different types of educational assistance made available under the program. (ii) Successful completion or attainment of a particular course grade is required for or considered in determining reimbursement under the program. (B) This section shall not be construed to affect the deduction or inclusion in income of amounts that are paid or incurred or received as reimbursement for educational expenses under Section 117, 162, or 212 of the Internal Revenue Code. (d) No deduction or credit shall be allowed to the employee with respect to any amount that the employee excludes from income pursuant to this section. (e) Section 127 of the Internal Revenue Code shall not apply. (f) This section shall apply with respect to expenses relating to courses beginning after June 30, 1996. (Amended by Stats. 2000, Ch. 107, Sec. 6. Effective July 10, 2000.)
  113. 17152.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section modifies how California applies the federal principal-residence gain exclusion, including Peace Corps service time, election rules, and some limits on separate state elections.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17152. Section 121 of the Internal Revenue Code, relating to exclusion of gain from sale of principal residence, is modified as follows: (a) The two-year period in Section 121(a) of the Internal Revenue Code shall be reduced by the period of the taxpayer’s service, not to exceed 18 months, in the Peace Corps during the five-year period ending on the date of the sale or exchange. (b) If the taxpayer is prohibited from filing a joint return pursuant to Section 18521, Section 121(b)(2)(A) of the Internal Revenue Code shall nevertheless be treated as being satisfied if the taxpayer files a joint return for federal income tax purposes for the same taxable year. However, in no instance shall the total amount excludable from gross income under Section 121(a) of the Internal Revenue Code with respect to any sale or exchange exceed the maximum amount allowed by Section 121(b) of the Internal Revenue Code. (c) (1) If a taxpayer has, at any time, made an election for federal purposes under Section 121(f) of the Internal Revenue Code not to have Section 121 of the Internal Revenue Code apply to a sale or exchange, Section 121 of the Internal Revenue Code shall not apply to that sale or exchange for state purposes, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, the federal election shall be binding for purposes of this part, and that election shall be treated as an election to include in gross income for purposes of this part all the gain from the sale or exchange of that property, including that amount which, but for that election, would have been excluded from income under Section 121(a) of the Internal Revenue Code for state purposes. (2) If a taxpayer fails to make an election for federal purposes under Section 121(f) of the Internal Revenue Code to not have Section 121 of the Internal Revenue Code apply to a sale or exchange, no election under Section 121(f) of the Internal Revenue Code shall be allowed for state purposes, Section 121 of the Internal Revenue Code shall apply to that sale or exchange for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (d) (1) If a taxpayer has, at any time, made an election for federal purposes under Section 312(d)(2) of the Taxpayer Relief Act of 1997 (Public Law 105-34), relating to sales before date of enactment, or Section 312(d)(4) of that act, relating to binding contracts, to not have the amendments made by Section 312 of the Taxpayer Relief Act of 1997 (Public Law 105-34) apply to a sale or exchange, the amendments made by the act adding this subdivision shall not apply to that sale or exchange, Sections 1, 4, and 6 of Chapter 610 of the Statutes of 1997 shall not apply to that sale or exchange, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election shall be binding for purposes of this part. (2) If a taxpayer fails to make an election for federal purposes under Section 312(d)(2) of the Taxpayer Relief Act of 1997 (Public Law 105-34), relating to sales before date of enactment, or Section 312(d)(4) of that act, relating to binding contracts, to not have the amendments made by Section 312 of the Taxpayer Relief Act of 1997 (Public Law 105-34) apply to a sale or exchange, an election under Section 312(d)(2) of the Taxpayer Relief Act of 1997 (Public Law 105-34), relating to sales before date of enactment, or Section 312(d)(4) of that act, relating to binding contracts, shall not be allowed for state purposes, the amendments made by the act adding this subdivision shall apply to that sale or exchange, Sections 1, 4, and 6 of Chapter 610 of the Statutes of 1997 shall apply to that sale or exchange, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (e) (1) If a taxpayer has, at any time, made or revoked an election for federal purposes under Section 121(d)(9) of the Internal Revenue Code to suspend the running of the five-year period described in Sections 121(a), 121(c)(1)(B), and 121(d)(7) of the Internal Revenue Code, that election or revocation of election to suspend the five-year period under Section 121(d)(9) of the Internal Revenue Code shall be applicable for state purposes, a separate election or revocation of election for purposes of Section 121(d)(9) of the Internal Revenue Code may not be allowed under paragraph (3) of subdivision (e) of Section 17024.5, and the federal election or revocation of election shall be binding for purposes of this part. (2) If a taxpayer fails to make an election for federal purposes under Section 121(d)(9) of the Internal Revenue Code to suspend the running of the five-year period described in Sections 121(a), 121(c)(1)(B), and 121(d)(7) of the Internal Revenue Code, that five-year period may not be suspended under Section 121(d)(9) of the Internal Revenue Code for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 17024.5. (f) Section 121(d)(11) of the Internal Revenue Code, relating to property acquired from a decedent, shall not apply. (g) The amendments made by Section 417 of the Tax Relief and Health Care Act of 2006 (Public Law 109-432) to Section 121(d)(9) of the Internal Revenue Code, relating to uniformed services, foreign service, and intelligence community, shall apply to sales or exchanges that occur on or after January 1, 2010. (h) The amendments made by subdivision (a) of Section 7 of the Mortgage Forgiveness Debt Relief Act of 2007 (Public Law 110-142) to Section 121 of the Internal Revenue Code, relating to exclusion of gain from sale of principal residence, shall apply to sales or exchanges that occur on or after January 1, 2010. (Amended by Stats. 2010, Ch. 14, Sec. 15. (SB 401) Effective January 1, 2011.)
  114. 17153.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include amounts received for empty beverage containers by a consumer from a recycling center or recycling location as recycling value.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17153.5. Gross income does not include any amount received for empty beverage containers by a consumer from a recycling center or recycling location as the recycling value, as defined in Chapter 2 (commencing with Section 14502) of Division 12.1 of the Public Resources Code. (Added by Stats. 1986, Ch. 1290, Sec. 3. Effective September 29, 1986.)
  115. 17154.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section changes a referenced federal tax rule by replacing one exclusion reference with another.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17154. Section 132(j)(8) of the Internal Revenue Code, relating to application of section to otherwise taxable educational or training benefits, is modified by substituting “which are not excludable under Section 17151” in lieu of “which are not excludable under Section 127”. (Added by Stats. 1997, Ch. 611, Sec. 20. Effective October 3, 1997.)
  116. 17155.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain compensation and settlement amounts are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17155. Gross income shall not include either of the following: (a) (1) Any amount, including any interest or property, that is received as compensation in any taxable year by a taxpayer pursuant to the German Act Regulating Unresolved Property Claims, as amended (Gesetz zur Regelung offener Vermogensfragen). (2) For purposes of this subdivision, the basis of any property received pursuant to the German Act Regulating Unresolved Property Claims shall be the fair market value of the property at the time of receipt by the taxpayer. (b) (1) Any amount received by a taxpayer who is a Holocaust victim or the heir or beneficiary of a Holocaust victim as a result of a settlement of claims against any entity or individual for any recovered asset. (2) For purposes of this subdivision: (A) “Holocaust victim” means a person who was persecuted by Nazi Germany or any Axis regime during any period from 1933 to 1945, inclusive. (B) “Recovered asset” means any asset of any type, including any bank deposits, insurance proceeds, or artwork owned by a Holocaust victim during any period from 1920 to 1945, inclusive, withheld from that Holocaust victim or his or her heirs or beneficiaries from and after 1945, and not recovered, returned, or otherwise compensated to a Holocaust victim or his or her heirs or beneficiaries until 1995, or thereafter. “Recovered asset” shall also include any interest earned on any of these assets. (Amended (as added by Stats. 1996, Ch. 29) by Stats. 1998, Ch. 962, Sec. 1. Effective January 1, 1999.)
  117. 17155.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include certain reparation payments for World War II slave or forced labor.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17155.5. Gross income does not include any amount received as reparation payments paid by the German Foundation known as Remembrance, Responsibility, and the Future, or any other source of humanitarian reparations made for purposes of redressing the injustice done to persons who were required to perform slave or forced labor during World War II. (Added by Stats. 2000, Ch. 685, Sec. 1. Effective September 27, 2000.)
  118. 17156.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    A taxpayer’s compensation received under Assembly Bill 110 of the 1999–2000 Regular Session is excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17156. (a) Gross income shall not include any amount received as compensation in any taxable year by a taxpayer pursuant to Assembly Bill 110 of the 1999–2000 Regular Session. (b) This section shall apply to taxable years beginning on or after January 1, 1999. (Added by Stats. 1999, Ch. 619, Sec. 2. Effective October 10, 1999. Note: The Assembly Bill 110 referred to in the text became Ch. 619.)
  119. 17156.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section applies Section 139F to California income tax and allows certain refund claims for pre-2018 overpayments if filed within one year starting January 1, 2018.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17156.1. (a) Section 304(a) as added by Public Law 114-113, which is codified as Section 139F of the Internal Revenue Code, relating to certain amounts received by wrongfully incarcerated individuals, shall apply. (b) This section shall apply to taxable years beginning before, on, or after January 1, 2018. (c) If the credit or refund of any overpayment of tax resulting from the application of this section to a period before January 1, 2018, is prevented as of such date by the operation of any law or rule of law (including res judicata), such credit or refund may nevertheless be allowed or made if the claim therefor is filed before the close of the one-year period beginning on January 1, 2018. (Added by Stats. 2017, Ch. 655, Sec. 1. (AB 454) Effective January 1, 2018.)
  120. 17156.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section applies Section 139C of the Internal Revenue Code to certain disability-related first responder retirement payments, and applies to amounts received for taxable years beginning on or after January 1, 2027.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17156.2. (a) Section 139C of the Internal Revenue Code, relating to certain disability-related first responder retirement payments, shall apply. (b) This section shall apply to amounts received with respect to taxable years beginning on or after January 1, 2027. (Added by Stats. 2025, Ch. 231, Sec. 24. (SB 711) Effective October 1, 2025.)
  121. 17156.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income excludes reparation payments paid by the Canadian government for redressing the injustice done to persons of Japanese ancestry interned in Canada during World War II.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17156.5. Gross income does not include any amount received as reparation payments paid by the Canadian government for the purpose of redressing the injustice done to persons of Japanese ancestry who were interned in Canada during World War II. (Added by Stats. 1999, Ch. 471, Sec. 2. Effective September 23, 1999.)
  122. 17157.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income does not include amounts received by a claimant under Penal Code Section 4904.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17157. Gross income shall not include any amount received in any taxable year by a claimant pursuant to Section 4904 of the Penal Code. (Added by Stats. 2000, Ch. 630, Sec. 2. Effective January 1, 2001.)
  123. 17157.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain Chiquita Canyon landfill event payments are excluded from gross income for limited taxable years, and the payor must give the Franchise Tax Board documentation on request.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17157.5. (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income does not include any Chiquita Canyon elevated temperature landfill event payment amount received by a taxpayer. (b) For purposes of this section: (1) “Chiquita Canyon elevated temperature landfill event” means the elevated temperature landfill event, beginning on May 1, 2022, that occurred beneath the Chiquita Canyon Landfill in the County of Los Angeles, California. (2) “Chiquita Canyon elevated temperature landfill event payment” means any amount received by a taxpayer on or after March 1, 2024, as compensation for loss, damages, expenses, relocation, suffering, loss in real property value, closing costs with respect to real property, including realtor commissions, or inconvenience, including access to real property, resulting from the Chiquita Canyon elevated temperature landfill event, if the amount was provided by either of the following: (A) A federal, state, or local governmental agency. (B) Waste Connections, Inc., any subsidiary, insurer, or agent of Waste Connections, Inc., or any person related to Waste Connections, Inc. (c) The payor shall provide, upon request by the Franchise Tax Board, documentation of the Chiquita Canyon elevated temperature landfill event payment amount in the form and manner requested by the Franchise Tax Board. (d) This section shall remain operative only until December 1, 2029, and is repealed as of that date. (Added by Stats. 2025, Ch. 17, Sec. 15. (SB 132) Effective June 27, 2025. Repealed as of December 1, 2029, by its own provisions.)
  124. 17158.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Certain COVID-19-related grant allocations are excluded from gross income, and the Franchise Tax Board may issue implementing regulations and audit the referenced grants.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158. (a) Gross income does not include any of the following grant allocations: (1) For taxable years beginning on or after January 1, 2020, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the COVID-19 Relief Grant that is administered by the Office of Small Business Advocate, is funded by Executive Order No. E 20/21-182, and is described in a letter from the Department of Finance to the Joint Legislative Budget Committee, dated December 17, 2020, entitled, “Disaster Response-Emergency Operations Account Request—Increased Funding for the California Rebuilding Fund and Funding to Support a New COVID-19 Relief Grant for Small Businesses.” (2) For taxable years beginning on or after January 1, 2020, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the California Small Business COVID-19 Relief Grant Program established by Section 12100.83 of the Government Code. (3) For taxable years beginning on or after September 1, 2020, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the California Venues Grant Program established by Section 12100.83.5 of the Government Code. (4) For taxable years beginning on or after January 1, 2021, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program established by Section 12100.975 of the Government Code. (b) Section 41 shall not apply to the exclusion allowed by this section. (c) Notwithstanding any other law, the Franchise Tax Board may include in audits the grants referenced in this section. (d) The Franchise Tax Board may adopt regulations that are necessary and appropriate to implement this section. (e) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any regulation, standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section. (f) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Amended by Stats. 2022, Ch. 736, Sec. 4. (AB 152) Effective September 29, 2022. Repealed as of December 1, 2030, by its own provisions.)
  125. 17158.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    For certain taxable years, grant allocations under the California Microbusiness COVID-19 Relief Program are excluded from gross income.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158.1. (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2025, gross income does not include grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program that is administered by the Office of Small Business Advocate pursuant to Article 9 (commencing with Section 12100.90) of Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code. (b) Section 41 shall not apply to the exclusion allowed by this section. (Amended by Stats. 2023, Ch. 196, Sec. 22. (SB 143) Effective September 13, 2023.)
  126. 17158.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section excludes restaurant revitalization grant amounts from gross income for taxable years beginning on or after January 1, 2020, and makes related guidance from the Franchise Tax Board exempt from the Administrative Procedure Act.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158.2. (a) For taxable years beginning on or after January 1, 2020, gross income does not include any amount awarded as a restaurant revitalization grant pursuant to Section 9009c of Title 15 of the United States Code. (b) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2020, paragraph (2) of Section 9673 of the American Rescue Plan Act of 2021 (Public Law 117-2) shall apply, except as provided. (2) Paragraph (2) of Section 9673 of the American Rescue Plan Act of 2021 (Public Law 117-2) is modified by substituting the phrase “provided by paragraph (1)” with “provided by this section.” (c) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) shall not apply to any standard, criterion, procedure, determination, rule, notice, guideline, or any other guidance established or issued by the Franchise Tax Board pursuant to this section. (d) This section shall be operative for taxable years beginning on or after January 1, 2020. (Added by Stats. 2022, Ch. 3, Sec. 11. (SB 113) Effective February 9, 2022.)
  127. 17158.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    Gross income excludes shuttered venue operator grants for taxable years beginning on or after January 1, 2019, subject to the section’s special rules for ineligible entities.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158.3. (a) For taxable years beginning on or after January 1, 2019, gross income does not include any amount awarded as a shuttered venue operator grant pursuant to Section 9009a of Title 15 of the United States Code. (b) (1) Notwithstanding Section 17280, for taxable years beginning on or after January 1, 2019, subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall apply, except as provided. (2) Subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) is modified by substituting the phrase “For purposes of the Internal Revenue Code of 1986” with “For purposes of this part”. (3) Paragraphs (2) and (3) of subsection (d) of Section 278 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260) shall not apply to an ineligible entity. (c) For purposes of this section: (1) “Ineligible entity” means a taxpayer that either: (A) Is a publicly-traded company. (B) Does not meet the reduction from the gross receipts requirements of Section 636(a)(37)(A)(iv)(bb) of Title 15 of the United States Code, as added by Section 311 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (2) “Publicly-traded company” means a publicly-traded entity as described in Section 342 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). (d) This section shall be operative for taxable years beginning on or after January 1, 2019. (Added by Stats. 2022, Ch. 3, Sec. 12. (SB 113) Effective February 9, 2022.)
  128. 17158.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says a specific federal tax rule does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158.4. Section 343 of the Protecting Americans from Tax Hikes Act of 2015 (Public Law 114-113), relating to exclusion from gross income of certain coal power grants to non-corporate taxpayers, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 25. (SB 711) Effective October 1, 2025.)
  129. 17158.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. )

    Verify source ↗

    This section says Section 3 of the Federal Disaster Tax Relief Act of 2023 does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 3. Items Specifically Excluded from Gross Income [17131 - 17158.5] ( Article 3 repealed and added by Stats. 1983, Ch. 488, Sec. 26. ) ## 17158.5. Section 3 of the Federal Disaster Tax Relief Act of 2023 (Public Law 118-148), relating to exclusion from gross income for compensation for losses or damages resulting from certain wildfires, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 26. (SB 711) Effective October 1, 2025.)
  130. 1716.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    If county officials decide an appraisal is needed to keep property assessments equal, the clerk and assessor must certify that decision to the State Board of Equalization.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1716. Whenever the board of supervisors and the assessor of any county determine that, in order to maintain the equality of the assessment of property within the county, an appraisal of all or any class of property is required, the clerk of the board of supervisors and the assessor shall certify this determination to the State Board of Equalization. Thereupon, the assessor, the chairman of the board of supervisors, and the member of the State Board of Equalization from the district which includes the county constitute an appraisal commission to conduct the appraisal. (Amended by Stats. 1963, Ch. 1801.)
  131. 1717.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    The appraisal commission may hire technical assistants if it considers them necessary for the required appraisal.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1717. The appraisal commission may employ any technical assistants it deems necessary to carry out the required appraisal. A person so employed is not an additional deputy or assistant of the assessor. (Amended by Stats. 1966, 1st Ex. Sess., Ch. 147.)
  132. 1717.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    Employees of an appraisal commission must disclose their financial interest in any corporation on a form provided by the State Board of Equalization.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1717.1. The requirements of Sections 670, 671 and 673 shall apply to employees of an appraisal commission. Upon being employed by an appraisal commission, the employee shall disclose, on a form provided by the State Board of Equalization, his financial interest in any corporation in accordance with Section 672. (Added by Stats. 1966, 1st Ex. Sess., Ch. 147.)
  133. 1718.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    Work done under this article supports the county board’s power to equalize assessments.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1718. All work done under this article is in furtherance of the power of the county board to equalize assessments. (Enacted by Stats. 1939, Ch. 154.)
  134. 1719.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    The county must treat the appraisal expenses as a county charge, and the board of supervisors may appropriate money to cover them.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1719. The expenses of this appraisal are a county charge, and the board of supervisors may make the necessary appropriations to meet these expenses. (Enacted by Stats. 1939, Ch. 154.)
  135. 172.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.6. Disaster Relief for Manufactured Homes [172 - 172.1] ( Heading of Chapter 2.6 amended by Stats. 2002, Ch. 775, Sec. 8. )

    Verify source ↗

    An owner may receive relief from local property taxation or vehicle license fees if a manufactured home is destroyed on or after January 1, 1982 because of a Governor-declared disaster.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.6. Disaster Relief for Manufactured Homes [172 - 172.1] ( Heading of Chapter 2.6 amended by Stats. 2002, Ch. 775, Sec. 8. ) ## 172. Whenever a manufactured home is destroyed on or after January 1, 1982, as the result of a disaster declared by the Governor, the owner shall be entitled to relief from local property taxation or vehicle license fees in accordance with the provisions of this chapter. (Amended by Stats. 2002, Ch. 775, Sec. 9. Effective January 1, 2003.)
  136. 172.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.6. Disaster Relief for Manufactured Homes [172 - 172.1] ( Heading of Chapter 2.6 amended by Stats. 2002, Ch. 775, Sec. 8. )

    Verify source ↗

    Owners seeking disaster-related tax relief for a replacement manufactured home must file a perjury declaration and provide required information; assessors or the department then apply the applicable tax or fee treatment.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 1. GENERAL PROVISIONS [101 - 198.1] ( Part 1 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 2.6. Disaster Relief for Manufactured Homes [172 - 172.1] ( Heading of Chapter 2.6 amended by Stats. 2002, Ch. 775, Sec. 8. ) ## 172.1. (a) To claim tax relief in accordance with the provisions of this chapter, the owner shall execute a declaration under penalty of perjury that the replaced manufactured home was destroyed by a disaster declared by the Governor and shall furnish with that declaration any other information, prescribed by the Department of Housing and Community Development after consultation with the California Assessors’ Association, as is necessary to establish eligibility for relief under this chapter. To be eligible for relief under this chapter, the replacement manufactured home must be comparable in size, utility, and location, as determined by the county assessor, with the destroyed manufactured home. For purpose of this section, “destroyed” means damaged to such an extent that the cost of repair to the manufactured home would exceed its value at that time immediately preceding its destruction, or the manufactured home is declared a total loss for insurance purposes. (b) If the replacement manufactured home is subject to local property taxation, the affidavit and documentation required by subdivision (a) shall be forwarded to the assessor of the county of situs. If the assessor determines that the owner of the replacement manufactured home is eligible for tax relief in accordance with the provisions of this chapter, the assessor shall, notwithstanding any other provision of law, do either of the following: (1) If the destroyed manufactured home was subject to the vehicle license fee, enroll the replacement manufactured home with an assessed valuation so that the local property taxes paid shall be the same amount as the vehicle license fee and registration fee due on the destroyed manufactured home for the year prior to its destruction. (2) If the destroyed manufactured home was subject to local property taxation, enroll the replacement manufactured home at a taxable value equal to the taxable value of the destroyed manufactured home at the time of its destruction. (c) If the assessor determines that the owner of the replacement manufactured home is not eligible for tax relief in accordance with the provisions of this chapter, the replacement manufactured home shall be assessed in accordance with Part 13 (commencing with Section 5800). (d) If the replacement manufactured home is subject to the vehicle license fee, the affidavit and documentation required by subdivision (a) shall be forwarded to the Department of Housing and Community Development. If the department determines that the owner is eligible for tax relief in accordance with the provisions of this chapter, the department shall do either of the following: (1) If the destroyed manufactured home was subject to the vehicle license fee, assign an in-lieu taxation classification and rating year for determination of depreciation such that the owner of the replacement manufactured home will be charged registration and license fees no greater than those he or she would have been charged for the destroyed manufactured home. (2) If the destroyed manufactured home was subject to local property taxation, assign an in-lieu taxation classification and rating year for determination of depreciation such that the owner of the replacement manufactured home will be charged registration and license fees equal to local property taxes paid on the destroyed manufactured home for the year prior to its destruction. (e) If the department determines that a replacement manufactured home subject to the vehicle license fee is not eligible for tax relief in accordance with the provisions of this chapter, the vehicle license fee for the replacement manufactured home shall be determined in accordance with the provisions of Sections 18115 and 18115.5 of the Health and Safety Code. (f) If the tax on a replacement manufactured home determined in accordance with subdivision (b) or (d) is greater than the tax would be if determined without reference to this chapter, the lesser amount shall be levied. (g) If a manufactured home subject to tax relief in accordance with the provisions of this chapter is subsequently sold or transferred to another party, the subsequent owner shall not receive this tax relief unless he or she is eligible in his or her own right for that relief. (Amended by Stats. 2002, Ch. 775, Sec. 10. Effective January 1, 2003.)
  137. 1720.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    A contract must not delegate the duty of conducting the appraisal to private interests.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1720. A contract shall not be made with any person by which the duty of conducting such an appraisal is delegated to any private interests. (Enacted by Stats. 1939, Ch. 154.)
  138. 17201.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says three listed parts of the federal Internal Revenue Code apply to California deductions rules, unless another provision says otherwise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201. (a) Part VI of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to itemized deductions for individuals and corporations, shall apply, except as otherwise provided. (b) Part VII of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to additional itemized deductions for individuals, shall apply, except as otherwise provided. (c) Part IX of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to items not deductible, shall apply, except as otherwise provided. (Repealed and added by Stats. 1993, Ch. 873, Sec. 12. Effective October 6, 1993.)
  139. 17201.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section makes several specified federal tax rules apply, and says certain other federal amendments and provisions do not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.1. (a) Section 174 of the Internal Revenue Code as it read on January 1, 2015, relating to amortization of research and experimental expenditures, shall apply. (b) Section 217(k) of the Internal Revenue Code, relating to the suspension of the moving expense deduction for taxable years 2018 to 2025, shall not apply. (c) The amendments made by Section 13304 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 274 of the Internal Revenue Code, relating to limitation on deduction by employers of expenses for fringe benefits, shall not apply. (d) The amendments made by Section 13202(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 280F of the Internal Revenue Code, relating to limitation on depreciation for luxury automobiles; limitation where certain property used for personal purposes, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 27. (SB 711) Effective October 1, 2025.)
  140. 17201.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says the referenced federal amendments apply, except as otherwise provided, and that Article 9 (starting with Section 23361) does not apply for purposes of this section.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.2. (a) The amendments made by Section 13531(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to add Section 162(r) to the Internal Revenue Code, relating to the disallowance of FDIC premiums paid by certain large financial institutions, shall apply, except as otherwise provided. (b) For purposes of this section, Article 9 (commencing with Section 23361) of Chapter 2 of Part 11 shall not apply. (Added by Stats. 2019, Ch. 39, Sec. 8. (AB 91) Effective July 1, 2019.)
  141. 17201.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section applies Internal Revenue Code Section 215 on alimony payments, as it read on January 1, 2015, except as otherwise provided.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.3. (a) Section 215 of the Internal Revenue Code, relating to alimony, etc., payments, as it read on January 1, 2015, shall apply, except as otherwise provided. (b) Subdivision (a) shall not apply for any divorce or separation instrument executed after December 31, 2025, or for any divorce or separation instrument executed on or before December 31, 2025, and modified after that date, if the modification expressly provides that the amendments made by this subdivision apply to such modification. (c) This section shall remain in effect only until December 1, 2027, and as of that date is repealed. (Added by Stats. 2025, Ch. 231, Sec. 28. (SB 711) Effective October 1, 2025. Repealed as of December 1, 2027, by its own provisions.)
  142. 17201.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 179B of the Internal Revenue Code does not apply here.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.4. Section 179B of the Internal Revenue Code, relating to deductions for capital costs incurred in complying with Environmental Protection Agency sulfur regulations, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 19. Effective October 7, 2005.)
  143. 17201.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 181 of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.5. Section 181 of the Internal Revenue Code, relating to treatment of certain qualified film and television productions, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 20. Effective October 7, 2005.)
  144. 17201.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 199A of the Internal Revenue Code, relating to qualified business income, does not apply under this provision.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.6. Section 199A of the Internal Revenue Code, relating to qualified business income, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 29. (SB 711) Effective October 1, 2025.)
  145. 17201.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says the referenced federal amendments on student loan interest deduction coordination shall apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17201.7. The amendments made by Section 302(b)(2) of Division O of the Further Consolidated Appropriations Act, 2020 (Public Law 116-94) to Section 221(e)(1) of the Internal Revenue Code, relating to coordination with deduction for student loan interest, shall apply. (Added by Stats. 2021, Ch. 557, Sec. 4. (AB 340) Effective January 1, 2022.)
  146. 17202.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    An employer may treat expenses for carrying out a parking cash-out program as an ordinary and necessary business expense for the taxable year, if the other stated tax conditions are met.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17202. There shall be allowed to an employer as an ordinary and necessary expense paid or incurred during the taxable year in carrying on any trade or business (as provided in Section 162(a) of the Internal Revenue Code), the expenses involved in carrying out a parking cash-out program, as defined by subdivision (f) of Section 65088.1 of the Government Code. (Added by Stats. 1992, Ch. 554, Sec. 7. Effective January 1, 1993.)
  147. 17203.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    For deduction limits in this section, “compensation” and “earned income” mean the amount used to limit the federal income tax deduction for the same taxable year.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17203. For purposes of applying limitations on the deductions described in this section, any reference to “compensation” or “earned income” shall be a reference to the amount required to be used for purposes of limiting the deduction in computing federal income tax for the same taxable year. (a) The deduction allowed by Section 219 of the Internal Revenue Code. (b) The deductions allowed by Sections 162(l) and 404 of the Internal Revenue Code in the case of an individual who is an employee within the meaning of Section 401(c)(1) of the Internal Revenue Code. (Added by Stats. 1996, Ch. 473, Sec. 1. Effective September 13, 1996.)
  148. 17204.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says several listed federal disaster-loss tax rules do not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17204. (a) Section 165(h)(3) of the Internal Revenue Code, relating to special rules for losses in federally declared disasters, shall not apply. (b) Section 165(h)(5) of the Internal Revenue Code, relating to limitation for taxable years 2018 to 2025, shall not apply. (c) The amendments by Section 11028(c) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 165 of the Internal Revenue Code, relating to special rules for personal casualty losses related to 2016 major disaster, shall not apply. (d) The amendments made by Section 304 of Division EE of Title III of the Consolidated Appropriations Act, 2021 (Public Law 116-260) to Section 165(h) of the Internal Revenue Code, relating to qualified disaster-related personal casualty losses, shall not apply. (e) Section 2 of the Federal Disaster Tax Relief Act of 2023 (Public Law 118-148), relating to extension of rules for treatment of certain disaster-related personal casualty losses, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 30. (SB 711) Effective October 1, 2025.)
  149. 17204.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    The referenced federal tax amendments for wagering losses do not apply under this section.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17204.2. The amendments made by Section 11050 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 165(d) of the Internal Revenue Code, relating to wagering losses, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 31. (SB 711) Effective October 1, 2025.)
  150. 17206.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A taxpayer may elect to treat certain qualifying cash contributions made in January 2005 as if they were made on December 31, 2004.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17206. (a) For purposes of Section 17201, Section 170 of the Internal Revenue Code, relating to charitable, etc., contributions and gifts, shall be applied to allow a taxpayer to elect to treat any contribution described in subdivision (b) made in January 2005, as if that contribution was made on December 31, 2004, and not in January 2005. (b) A contribution is described in this subdivision if that contribution is a cash contribution made for the relief of victims in areas affected by the December 26, 2004, Indian Ocean tsunami for which a charitable contribution deduction is allowable under Section 17201. (Amended by Stats. 2010, Ch. 14, Sec. 17. (SB 401) Effective January 1, 2011.)
  151. 17207.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Excess disaster losses can be carried forward to later taxable years, subject to the section’s timing rules and listed disaster-related losses.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses resulting from any of the following disasters: (1) Forest fire or any other related casualty occurring in 1985 in California. (2) Storm, flooding, or any other related casualty occurring in 1986 in California. (3) Any loss sustained during 1987 as a result of a forest fire or any other related casualty. (4) Earthquake, aftershock, or any other related casualty occurring in 1987 in California. (5) Earthquake, aftershock, or any other related casualty occurring in 1989 in California. (6) Any loss sustained during 1990 as a result of fire or any other related casualty in California. (7) Any loss sustained as a result of the Oakland/Berkeley Fire of 1991, or any other related casualty. (8) Any loss sustained as a result of storm, flooding, or any other related casualty occurring in February 1992 in California. (9) Earthquake, aftershock, or any other related casualty occurring in April 1992 in the County of Humboldt. (10) Riots, arson, or any other related casualty occurring in April or May 1992 in California. (11) Any loss sustained as a result of the earthquakes that occurred in the County of San Bernardino in June and July of 1992, or any other related casualty. (12) Any loss sustained as a result of the Fountain Fire that occurred in the County of Shasta, or as a result of either of the fires in the Counties of Calaveras and Trinity that occurred in August 1992, or any other related casualty. (13) Any loss sustained as a result of storm, flooding, or any other related casualty that occurred in the Counties of Alpine, Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles, Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside, San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma, Tehama, Trinity, and Tulare, and the City of Fillmore in January 1993. (14) Any loss sustained as a result of a fire that occurred in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, during October or November of 1993, or any other related casualty. (15) Any loss sustained as a result of the earthquake, aftershocks, or any other related casualty that occurred in the Counties of Los Angeles, Orange, and Ventura on or after January 17, 1994. (16) Any loss sustained as a result of a fire that occurred in the County of San Luis Obispo during August of 1994, or any other related casualty. (17) Any loss sustained as a result of the storms or flooding occurring in 1995, or any other related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms and flooding. (18) Any loss sustained as a result of the storms or flooding occurring in December 1996 or January 1997, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding. (19) Any loss sustained as a result of the storms or flooding occurring in February 1998, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding. (20) Any loss sustained as a result of a freeze occurring in the winter of 1998–99, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the freeze. (21) Any loss sustained as a result of an earthquake occurring in September 2000, that was included in the Governor’s proclamation of a state of emergency for the County of Napa. (22) Any loss sustained as a result of the Middle River levee break in San Joaquin County occurring in June 2004. (23) Any losses sustained as a result of the fires that occurred in the Counties of Los Angeles, Riverside, San Bernardino, San Diego, and Ventura in October and November 2003, or as a result of floods, mudflows, and debris flows, directly related to fires. (24) Any losses sustained in the Counties of Santa Barbara and San Luis Obispo as a result of the San Simeon earthquake, aftershocks, and any other related casualties. (25) Any losses sustained as a result of the wildfires that occurred in Shasta County, commencing August 11, 2004, and any other related casualty. (26) Any loss sustained in the Counties of Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura as a result of the severe rainstorms, related flooding and slides, and any other related casualties, that occurred in December 2004, January 2005, February 2005, March 2005, or June 2005. (27) Any loss sustained in the Counties of Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Humboldt, Kings, Lake, Lassen, Madera, Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Joaquin, San Luis Obispo, San Mateo, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Trinity, Tulare, Tuolumne, Yolo, and Yuba as a result of the severe rainstorms, related flooding and slides, and any other related casualties, that occurred in December 2005, January 2006, March 2006, or April 2006. (28) Any loss sustained in the County of San Bernardino as a result of the wildfires that occurred in July 2006. (29) Any loss sustained in the Counties of Riverside and Ventura as a result of wildfires that occurred during the 2006 calendar year. (30) Any loss sustained in the Counties of El Dorado, Fresno, Imperial, Kern, Kings, Madera, Merced, Monterey, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Santa Clara, Stanislaus, Tulare, Ventura, and Yuba that were the subject of the Governor’s proclamations of a state of emergency for the severe freezing conditions that occurred in January 2007. (31) Any loss sustained in the County of El Dorado as a result of wildfires that occurred in June 2007. (32) Any loss sustained in the Counties of Santa Barbara and Ventura as a result of the Zaca Fire that occurred during the 2007 calendar year. (33) Any loss sustained in the County of Inyo as a result of wildfires that commenced in July 2007. (34) Any loss sustained in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura as a result of wildfires that occurred during the 2007 calendar year that were the subject of the Governor’s disaster proclamations of September 15, 2007, and October 21, 2007. (35) Any loss sustained in the County of Riverside as a result of extremely strong and damaging winds that occurred in October 2007. (36) Any loss sustained in the Counties of Butte, Kern, Mariposa, Mendocino, Monterey, Plumas, Santa Clara, Santa Cruz, Shasta, and Trinity as a result of wildfires that occurred in May or June 2008 that were the subject of the Governor’s proclamations of a state of emergency. (37) Any loss sustained in the County of Santa Barbara as a result of wildfires that occurred in July 2008. (38) Any loss sustained in the County of Inyo as a result of the severe rainstorms, related flooding and landslides, and any other related casualties, that occurred in July 2008. (39) Any loss sustained in the County of Humboldt as a result of wildfires that commenced in May 2008. (40) Any loss sustained in the County of Santa Barbara as a result of wildfires that commenced in November 2008. (41) Any loss sustained in the Counties of Los Angeles and Ventura as a result of wildfires that commenced in October 2008 or November 2008 that were the subject of the Governor’s proclamations of a state of emergency. (42) Any loss sustained in the Counties of Orange, Riverside, and San Bernardino as a result of wildfires that commenced in November 2008. (43) Any loss sustained in the County of Santa Barbara as a result of wildfires that commenced in May 2009. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in paragraphs (15) to (43), inclusive, of subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Amended by Stats. 2009, Ch. 299, Sec. 2. (AB 1568) Effective January 1, 2010.)
  152. 17207.11.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Special tax-loss rules apply to certain March 2011 storm losses in Santa Cruz County, including a filing deadline for the election and a rule limiting other laws that would reduce the related net operating loss deduction.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.11. (a) Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the County of Santa Cruz as a result of the severe storms that occurred in March 2011. (b) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to extension, for the taxable year in which the disaster occurred. (c) Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a). (Added by Stats. 2012, Ch. 203, Sec. 1. (AB 2332) Effective August 27, 2012.)
  153. 17207.12.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Certain disaster losses in Los Angeles and San Bernardino Counties from the November 2011 severe winds are covered, and the related Section 165(i) election can be made on a timely return or amended return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.12. (a) Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the Counties of Los Angeles and San Bernardino as a result of the severe winds that occurred in November 2011. (b) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to extension, for the taxable year in which the disaster occurred. (c) Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a). (Added by Stats. 2012, Ch. 284, Sec. 1. (SB 1544) Effective September 7, 2012.)
  154. 17207.13.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section makes Internal Revenue Code section 165(i) apply to certain San Diego wildfire losses from May 2014 and lets the election be made on a return or amended return by the applicable filing deadline.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.13. (a) Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the County of San Diego as a result of the wildfires that occurred in May 2014. (b) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to extension, for the taxable year in which the disaster occurred. (c) Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a). (Added by Stats. 2014, Ch. 352, Sec. 1. (AB 922) Effective September 16, 2014.)
  155. 17207.14.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section lets eligible taxpayers apply disaster-loss treatment for certain California disaster losses, allows the election on a timely return or amended return, limits conflicting net operating loss rules, requires an annual Franchise Tax Board report, and sunsets on December 1, 2029.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.14. (a) For taxable years beginning on or after January 1, 2014, and before January 1, 2029, Section 165(i) of the Internal Revenue Code, relating to disaster losses, shall be applicable to any loss sustained as a result of any disaster occurring in any city, county, or city and county in this state that is proclaimed by the Governor to be in a state of emergency. (b) (1) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code, relating to disaster losses, may be made on a return or amended return filed on or before the due date of the return, determined with regard to any extension of time for filing the return, for the taxable year in which the disaster occurred. (2) Notwithstanding Section 18572, this subdivision shall apply to any loss described in subdivision (a). (c) Unless specifically provided otherwise, any law, other than Section 17276, that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a). (d) (1) For purposes of complying with Section 41, as it applies to the deduction allowed by this section and Section 24347.14, the Legislature finds and declares as follows: (A) The specific goal, purpose, and objective of the deduction is to support taxpayers whose business or personal property is completely or partially destroyed due to a disaster. (B) The performance indicator for the Legislature to use in determining if the deduction achieves its stated purpose is the number of taxpayers allowed a deduction pursuant to this section or Section 24347.14. (2) (A) By May 1, 2025, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a deduction pursuant to this section and Section 24347.14. (B) The disclosure provisions of this paragraph shall be treated as an exception to Section 19542. (e) This section shall remain in effect only until December 1, 2029, and as of that date is repealed. (Amended by Stats. 2023, Ch. 285, Sec. 1. (SB 264) Effective September 30, 2023. Repealed as of December 1, 2029, by its own provisions.)
  156. 17207.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section lets certain disaster losses from the January 2010 Humboldt County earthquake be carried to later taxable years, and it limits how those losses can be used for net operating loss deductions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.2. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Humboldt as a result of the earthquake that occurred in January 2010. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Added by Stats. 2010, Ch. 449, Sec. 5. (AB 1690) Effective September 29, 2010.)
  157. 17207.3.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section lets certain disaster losses be carried forward to later taxable years and sets a deadline for making the Section 165(i) election on a return or amended return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.3. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Imperial as a result of the earthquake that occurred in April 2010. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Added by Stats. 2010, Ch. 461, Sec. 6. (AB 2136) Effective September 29, 2010.)
  158. 17207.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    An appraisal for a federal disaster-related loan or loan guarantee may be used to establish certain loss amounts, if Treasury regulations or guidance allow it.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.4. (a) Section 165(i) of the Internal Revenue Code is modified to additionally provide that an appraisal for the purpose of obtaining a loan of federal funds or a loan guarantee from the federal government as a result of a presidentially declared disaster, as defined by Section 1033(h)(3) of the Internal Revenue Code, may be used to establish the amount of any loss described in Section 165(i)(1) or (2) of the Internal Revenue Code to the extent provided in regulations or other guidance of the Secretary of the Treasury under Section 165(i)(4) of the Internal Revenue Code, as added by Section 912 of Public Law 105-34. (b) This section shall apply on and after August 5, 1997. (Added by Stats. 1998, Ch. 7, Sec. 6. Effective March 14, 1998.)
  159. 17207.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Excess disaster losses may be carried to other taxable years under the section’s rules, and a Section 165(i) election for listed disaster losses must be made on a timely return or amended return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.6. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses resulting from any of the following disasters: (1) Any loss sustained in the Counties of Los Angeles and Monterey as a result of wildfires that commenced in August 2009. (2) Any loss sustained in the County of Placer as a result of wildfires that commenced in August 2009. (3) Any loss sustained in the Counties of Calaveras, Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Francisco, and Siskiyou as a result of winter storms that commenced in January 2010. (4) Any loss sustained in the County of Kern as a result of the wildfires that commenced in July 2010. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Added by Stats. 2010, Ch. 447, Sec. 5. (AB 1662) Effective September 29, 2010.)
  160. 17207.7.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Special disaster losses from the March 2011 Mendocino County tsunami are carried forward to other tax years under set rules.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.7. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Mendocino as a result of the tsunami that occurred in March 2011. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) This section and Section 165(i) of the Internal Revenue Code apply to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section shall not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Amended by Stats. 2015, Ch. 303, Sec. 469. (AB 731) Effective January 1, 2016.)
  161. 17207.8.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    An excess disaster loss from the listed disaster may be carried to other taxable years under specified rules, and an election under Section 165(i) may be made on a timely return or amended return.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17207.8. (a) An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of San Mateo as a result of the explosion and fire that occurred in September 2010. (b) (1) In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 17276, of that excess disaster loss shall be carried forward to each of the next 10 taxable years. (2) The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried. (c) “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss. (d) This section and Section 165(i) of the Internal Revenue Code apply to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster. (e) Losses allowable under this section shall not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code. (f) For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code. (g) For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred. (Amended by Stats. 2015, Ch. 303, Sec. 470. (AB 731) Effective January 1, 2016.)
  162. 17208.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A taxpayer may deduct interest on qualifying loans from a publicly owned utility company used to buy and install energy-efficient products or equipment at a qualified residence in this state.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17208.1. (a) There shall be allowed as a deduction the amount of interest paid or incurred by a taxpayer during the taxable year on any loan or financed indebtedness obtained from a publicly owned utility company for the purpose of acquiring and installing any energy efficient product or equipment to a qualified residence located in this state. (b) For purposes of this section: (1) “Energy efficient product or equipment” means any product or equipment certified by a publicly owned utility company that will improve the energy efficiency, as defined by paragraph (2) of subdivision (a) of Section 399.4 of the Public Utilities Code, of a qualified residence on which the product or equipment is installed or applied. (2) “Energy efficient product or equipment” shall include, but not be limited to, heating, ventilation, air-conditioning, lighting, solar, advanced metering of energy usage, windows, insulation, zone heating products, and weatherization systems. (3) “Zone heating products” mean gas room heaters certified by the California Energy Commission or wood fueled stoves certified by the federal Environmental Protection Agency. (4) “Publicly owned utility company” has the same meaning as set forth in subdivision (d) of Section 9604 of the Public Utilities Code. (5) “Qualified residence” has the same meaning as set forth in Section 163(h)(4)(A) of the Internal Revenue Code. (6) “Publicly owned utility company loan or financial indebtedness” means any amount borrowed from a publicly owned utility company to finance the acquisition and installation of energy efficient products and equipment installed or applied to a qualified residence located in this state. (c) Any interest amount that is allowed as a deduction pursuant to this section (and the application of Section 17072) may not otherwise be allowed as a deduction for purposes of this part. (d) The publicly owned utility company shall issue a federal income tax Form 1098, or similar form, for the purpose of notifying the taxpayer of his or her eligibility for the deduction allowed by this section. (e) The deduction allowed by this section shall be in lieu of any credit allowed by this part for interest paid or incurred by the taxpayer in connection with the purchase of energy efficient equipment. (f) The Legislature finds and declares that many taxpayers may be unaware that they may deduct interest paid or incurred pursuant to this section. The Legislature further finds that it is important to inform taxpayers of this deduction. Therefore, it is the intent of the Legislature to encourage all publicly owned utility companies to inform their customers in writing that they may deduct interest paid or incurred pursuant to this section. It is the further intent of the Legislature to encourage all publicly owned utility companies that are unable to offer customer financing to acquire or install energy efficient products and equipment to inform their customers in writing that interest on a home equity or home improvement loan used to purchase energy efficient products and equipment may also be tax deductible. (g) It is the intent of the Legislature to inquire with the Internal Revenue Service as to whether the loan program administered by the Sacramento Municipal Utility District qualifies for an interest deduction in compliance with the Internal Revenue Code and the regulations thereunder. (Added by Stats. 2001, 2nd Ex. Sess., Ch. 5, Sec. 2. Effective October 1, 2001.)
  163. 17209.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    For a limited period, Section 280E does not apply to a licensee’s commercial cannabis activity.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17209. (a) For each taxable year beginning on or after January 1, 2020, and before January 1, 2030, Section 280E of the Internal Revenue Code, relating to expenditures in connection with the illegal sale of drugs, shall not apply to the carrying on of any trade or business that is commercial cannabis activity by a licensee. (b) For purposes of this section, “commercial cannabis activity” and “licensee” shall have the same meanings as set forth in Division 10 (commencing with Section 26000) of the Business and Professions Code. (c) This section shall remain in effect only until December 1, 2030, and as of that date is repealed. (Amended by Stats. 2024, Ch. 34, Sec. 19. (SB 167) Effective June 27, 2024. Repealed as of December 1, 2030, by its own provisions.)
  164. 1721.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. )

    Verify source ↗

    Taxable property generally may not be appraised for taxation by any county except under this article, with stated carve-outs.

    ## Revenue and Taxation Code - RTC ## DIVISION 1. PROPERTY TAXATION [50 - 5911] ( Division 1 enacted by Stats. 1939, Ch. 154. ) ## PART 3. EQUALIZATION [1601 - 2125] ( Part 3 enacted by Stats. 1939, Ch. 154. ) ## CHAPTER 1. Equalization by County Board of Equalization [1601 - 1721] ( Chapter 1 enacted by Stats. 1939, Ch. 154. ) ## ARTICLE 4. Equalization with Assistance of Appraisal Commission [1716 - 1721] ( Article 4 enacted by Stats. 1939, Ch. 154. ) ## 1721. Save assessments by the assessor or valuations of individual parcels by the county board during its authorized sessions, taxable property shall not be appraised for taxation under authority of any county except under this article. (Enacted by Stats. 1939, Ch. 154.)
  165. 17215.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section changes the deduction amount for certain medical savings account deductions and changes one federal cross-reference to use 12.5 percent instead of 20 percent.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17215. (a) Section 220(a) of the Internal Revenue Code, relating to deduction allowed, is modified to provide that the amount allowed as a deduction shall be an amount equal to the amount allowed to that individual as a deduction under Section 220 of the Internal Revenue Code, relating to medical savings accounts, on the federal income tax return filed for the same taxable year by that individual. (b) Section 220(f)(4) of the Internal Revenue Code, relating to additional tax on distributions not used for qualified medical expenses, is modified by substituting “12.5 percent” in lieu of “20 percent.” (c) The amendments made to this section by the act adding this subdivision shall apply to disbursements made during taxable years beginning on or after January 1, 2016. (Amended by Stats. 2015, Ch. 359, Sec. 12. (AB 154) Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  166. 17215.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 220(f)(5) of the Internal Revenue Code, about rollover contributions, does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17215.1. Section 220(f)(5) of the Internal Revenue Code, relating to rollover contributions, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 26.5. Effective October 7, 2005.)
  167. 17215.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 223 of the Internal Revenue Code, which relates to health savings accounts, does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17215.4. Section 223 of the Internal Revenue Code, relating to health savings accounts, shall not apply. (Added by Stats. 2005, Ch. 691, Sec. 26.6. Effective October 7, 2005.)
  168. 17220.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Certain tax deductions are disallowed for taxes imposed under specified California chapters and Part 11.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17220. (a) Section 164(a)(3) of the Internal Revenue Code, relating to the deductibility of state, local, and foreign income, war profits, and excess profits taxes, shall not apply. (b) Section 164(b)(5) of the Internal Revenue Code, relating to general sales taxes, shall not apply. (c) Section 164(b)(6) of the Internal Revenue Code, relating to the limitation on individual deductions for taxable years 2018 to 2025, shall not apply. (d) In addition to the provisions of Section 164(c) of the Internal Revenue Code, relating to deduction denied in case of certain taxes, no deduction shall be allowed for any tax imposed under Chapter 10.5 (commencing with Section 17935), Chapter 10.6 (commencing with Section 17941), or Chapter 10.7 (commencing with Section 17948) of this part or under Part 11 (commencing with Section 23001). (Amended by Stats. 2025, Ch. 231, Sec. 33. (SB 711) Effective October 1, 2025.)
  169. 17222.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    No deduction is allowed for certain unemployment insurance tax withheld amounts when computing taxable income under this part.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17222. No deduction shall be allowed for the tax deducted and withheld under Section 18662 and Section 13020 of the Unemployment Insurance Code either to the employer or to the recipient of the income in computing taxable income under this part. (Amended by Stats. 1993, Ch. 31, Sec. 8. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)
  170. 17224.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section changes how a deduction is treated for certain debt obligations, tying the California deduction amount to the federal deduction amount in specified taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17224. Section 163(e) of the Internal Revenue Code is modified as follows: (a) For taxable years beginning on or after January 1, 1987, and before the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed, the amount deductible under this part is the same as the amount deductible on the federal tax return. (b) The difference between the amount deductible on the federal tax return and the amount allowable under this part, with respect to obligations issued after December 31, 1984, for taxable years beginning before January 1, 1987, shall be allowed as a deduction in the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed. (c) The provisions of Section 7202(c) of Public Law 101-239, relating to the effective date for treatment of certain high yield original issue discount obligations, shall apply. (Amended by Stats. 1990, Ch. 452, Sec. 9. Effective July 31, 1990. Applicable to taxable years beginning on or after January 1, 1990, by Sec. 56 of Ch. 452.)
  171. 17225.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Two Internal Revenue Code rules do not apply here: the rule on mortgage insurance premiums treated as interest, and the rule on special rules for taxable years 2018 to 2025.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17225. (a) Section 163(h)(3)(E) of the Internal Revenue Code, relating to mortgage insurance premiums treated as interest, shall not apply. (b) Section 163(h)(3)(F) of the Internal Revenue Code, relating to special rules for taxable years 2018 to 2025, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 34. (SB 711) Effective October 1, 2025.)
  172. 17228.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    For taxable years beginning on or after January 1, 2014, owners of all or part of a professional sports franchise cannot deduct fines or penalties they paid or incurred when the fine or penalty was imposed by the league that includes the franchise.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17228. For taxable years beginning on or after January 1, 2014, a deduction shall not be allowed for the amount of any fine or penalty paid or incurred by an owner of all or part of a professional sports franchise, where that fine or penalty is assessed or imposed by the professional sports league that includes that franchise. (Added by Stats. 2014, Ch. 792, Sec. 1. (AB 877) Effective September 29, 2014.)
  173. 17230.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Payments a borrower makes to the California Housing Finance Agency under the referenced Health and Safety Code section are treated as interest for Internal Revenue Code section 163 purposes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17230. Payments made to the California Housing Finance Agency by the borrower pursuant to Section 52514 of the Health and Safety Code shall be considered payments of interest for purposes of Section 163 of the Internal Revenue Code. (Repealed and added by Stats. 1983, Ch. 488, Sec. 29. Effective July 28, 1983.)
  174. 17240.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section treats the fee imposed by Section 9008 of the Affordable Care Act as a tax described in the Internal Revenue Code.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17240. The fee imposed by Section 9008 of the Patient Protection and Affordable Care Act (Public Law 111-148), shall be considered a tax described in Section 275(a)(6) of the Internal Revenue Code. (Added by Stats. 2015, Ch. 359, Sec. 13. (AB 154) Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  175. 17241.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    For certain taxable years, the deduction percentage is changed from 10 percent to 7.5 percent.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17241. Section 213(a) of the Internal Revenue Code, relating to allowance of deduction, is modified by substituting “7.5 percent” for “10 percent” for taxable years beginning before January 1, 2021. (Amended by Stats. 2025, Ch. 231, Sec. 35. (SB 711) Effective October 1, 2025. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)
  176. 17250.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Taxpayers claiming a depreciation deduction for certain grapevines must get a written certification and keep it for audit purposes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17250. (a) Section 168 of the Internal Revenue Code is modified as follows: (1) Any reference to “tax imposed by this chapter” in Section 168 of the Internal Revenue Code means “net tax,” as defined in Section 17039. (2) (A) Section 168(e)(3) is modified to provide that any grapevine, replaced in a vineyard in California in any taxable year beginning on or after January 1, 1992, as a direct result of a phylloxera infestation in that vineyard, or replaced in a vineyard in California in any taxable year beginning on or after January 1, 1997, as a direct result of Pierce’s disease in that vineyard, shall be “five-year property,” rather than “10-year property.” (B) Section 168(g)(3) of the Internal Revenue Code is modified to provide that any grapevine, replaced in a vineyard in California in any taxable year beginning on or after January 1, 1992, as a direct result of a phylloxera infestation in that vineyard, or replaced in a vineyard in California in any taxable year beginning on or after January 1, 1997, as a direct result of Pierce’s disease in that vineyard, shall have a class life of 10 years. (C) Every taxpayer claiming a depreciation deduction with respect to grapevines as described in this paragraph shall obtain a written certification from an independent state-certified integrated pest management adviser, or a state agricultural commissioner or adviser, that specifies that the replanting was necessary to restore a vineyard infested with phylloxera or Pierce’s disease. The taxpayer shall retain the certification for future audit purposes. (3) Section 168(j) of the Internal Revenue Code, relating to property on Indian reservations, shall not apply. (4) Section 168(k) of the Internal Revenue Code, relating to special allowance for certain property, shall not apply. (5) Section 168(e)(3)(E)(vii) of the Internal Revenue Code shall not apply. (6) Sections 168(b)(3)(G) and 168(e)(6) of the Internal Revenue Code, relating to qualified improvement property, shall not apply. (7) (A) Sections 168(g)(1)(F) and 168(g)(1)(G) of the Internal Revenue Code shall not apply. (B) The amendments made by Section 13204(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Sections 168(g)(2)(C) and 168(g)(3)(B) of the Internal Revenue Code shall not apply. (C) Section 168(g)(8) of the Internal Revenue Code, relating to electing real property trade or business, shall not apply. (8) Section 168(l) of the Internal Revenue Code, relating to qualified second generation biofuel plant property, shall not apply. (9) Section 168(m) of the Internal Revenue Code, relating to special allowance for certain reuse and recycling property, shall not apply. (10) Section 168(i)(15)(D) of the Internal Revenue Code, relating to termination, is modified by substituting the phrase “December 31, 2007” for the phrase “December 31, 2025.” (11) Sections 168(e)(3)(B)(vii) and 168(e)(3)(B)(viii) of the Internal Revenue Code shall not apply. (b) Section 169 of the Internal Revenue Code, relating to amortization of pollution control facilities, is modified as follows: (1) The deduction allowed by Section 169 of the Internal Revenue Code shall be allowed only with respect to facilities located in this state. (2) The “state certifying authority,” as defined in Section 169(d)(2) of the Internal Revenue Code, means the State Air Resources Board, in the case of air pollution, and the State Water Resources Control Board, in the case of water pollution. (Amended by Stats. 2025, Ch. 231, Sec. 36. (SB 711) Effective October 1, 2025.)
  177. 17250.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says certain federal tax code provisions do not apply, while one specified provision does apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17250.1. (a) Section 170(b)(1)(A)(ix) of the Internal Revenue Code, relating to percentage limitations, shall not apply. (b) Section 170(b)(1)(G) of the Internal Revenue Code, relating to increased limitation for cash contributions, shall not apply. (c) Section 170(b)(1)(E)(vi) of the Internal Revenue Code as it read on January 1, 2015, relating to termination, shall apply. (Added by Stats. 2025, Ch. 231, Sec. 37. (SB 711) Effective October 1, 2025.)
  178. 17250.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 170(p) of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17250.2. Section 170(p) of the Internal Revenue Code, relating to special rule for taxpayers who do not elect to itemize deductions, shall not apply. (Added by Stats. 2025, Ch. 231, Sec. 38. (SB 711) Effective October 1, 2025.)
  179. 17250.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section changes how certain Internal Revenue Code depreciation and amortization rules apply for California tax purposes.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17250.5. (a) Section 167(g) of the Internal Revenue Code, relating to depreciation under income forecast method, shall be modified as follows: (1) Section 167(g)(2)(C) of the Internal Revenue Code is modified by substituting “Section 19521” for “Section 460(b)(7)” of the Internal Revenue Code. (2) Section 167(g)(5)(D) of the Internal Revenue Code is modified by substituting “Part 10.2 (commencing with Section 18401) (other than Section 19136)” for “Subtitle F (other than Sections 6654 and 6655).” (3) Section 167(g)(5)(E) of the Internal Revenue Code, relating to treatment of distribution costs, shall not apply. (4) Section 167(g)(7) of the Internal Revenue Code, relating to treatment of participations and residuals, shall not apply. (b) Section 167(h) of the Internal Revenue Code, relating to amortization of geological and geophysical expenditures, shall not apply. (Amended by Stats. 2010, Ch. 14, Sec. 20. (SB 401) Effective January 1, 2011.)
  180. 17255.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section limits California’s conformity to Internal Revenue Code Section 179 by replacing some federal rules with a $25,000 annual cap and a reduction rule tied to property placed in service over $200,000.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17255. (a) Section 179(b)(1) of the Internal Revenue Code, relating to dollar limitation, shall not apply and in lieu thereof, the aggregate cost which may be taken into account under Section 179(a) of the Internal Revenue Code for any taxable year shall not exceed twenty-five thousand dollars ($25,000). (b) Section 179(b)(2) of the Internal Revenue Code, relating to reduction in limitation, does not apply and in lieu thereof, the limitation under subdivision (a) for any taxable year shall be reduced, but not to below zero, by the amount by which the cost of Section 179 property, as defined in Section 179(d)(1) of the Internal Revenue Code, except as otherwise provided, placed in service during the taxable year exceeds two hundred thousand dollars ($200,000). (c) Section 179 of the Internal Revenue Code is modified to provide that the “aggregate amount disallowed” referred to in Section 179(b)(3)(B) of the Internal Revenue Code shall be computed under this part as it read on the date the property generating the amount disallowed was placed in service. (d) Section 179(c)(2) of the Internal Revenue Code, relating to elections, shall not apply. (e) Section 179(d)(1)(A)(ii) of the Internal Revenue Code does not apply. (f) Section 179(e) of the Internal Revenue Code, relating to special rules for qualified disaster assistance property, shall not apply. (g) The amendments made by Section 124 of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 179 of the Internal Revenue Code, relating to elections to expense certain depreciable business assets, shall not apply. (h) The amendments made by Section 13101 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 179 of the Internal Revenue Code, relating to elections to expense certain depreciable business assets, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 39. (SB 711) Effective October 1, 2025.)
  181. 17256.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 179A of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17256. Section 179A of the Internal Revenue Code, relating to deduction for clean-fuel vehicles and certain refueling property, shall not apply. (Amended by Stats. 2005, Ch. 691, Sec. 32. Effective October 7, 2005.)
  182. 17257.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 179C of the Internal Revenue Code does not apply under this provision.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17257. Section 179C of the Internal Revenue Code, relating to election to expense certain refineries, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 22. (SB 401) Effective January 1, 2011.)
  183. 17257.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 179D of the Internal Revenue Code does not apply under this provision.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17257.2. Section 179D of the Internal Revenue Code, relating to energy efficient commercial buildings deduction, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 23. (SB 401) Effective January 1, 2011.)
  184. 17257.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Section 179E of the Internal Revenue Code does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17257.4. Section 179E of the Internal Revenue Code, relating to election to expense advanced mine safety equipment, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 24. (SB 401) Effective January 1, 2011.)
  185. 17260.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section limits deductions for certain expenditures, including tertiary injectants and some intangible drilling and development costs, and carves out specified exceptions tied to Internal Revenue Code sections.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17260. (a) No deduction, other than depreciation, shall be allowed for expenditures for tertiary injectants as provided by Section 193 of the Internal Revenue Code. (b) Section 263(a) of the Internal Revenue Code shall not apply to expenditures for which a deduction is allowed under Section 17266 or 17267.2. (c) Section 263(c) of the Internal Revenue Code, relating to intangible drilling and development costs in the case of oil and gas wells and geothermal wells, shall not apply to intangible drilling and development costs, in the case of oil and gas wells, paid or incurred on or after January 1, 2024. (Amended by Stats. 2024, Ch. 34, Sec. 20. (SB 167) Effective June 27, 2024.)
  186. 17269.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Certain club-related expenses are not deductible, and some clubs must print a nondeductibility statement on receipts.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17269. Whereas, the people of the State of California desire to promote and achieve tax equity and fairness among all the state’s citizens and further desire to conform to the public policy of nondiscrimination, the Legislature hereby enacts the following for these reasons and for no other purpose: (a) The provisions of Section 162(a) of the Internal Revenue Code shall not be applicable to expenses incurred by a taxpayer with respect to expenditures made at, or payments made to, a club which restricts membership or the use of its services or facilities on the basis of ancestry or any characteristic listed or defined in Section 11135 of the Government Code, except for genetic information. (b) A club described in subdivision (a) holding an alcoholic beverage license pursuant to Division 9 (commencing with Section 23000) of the Business and Professions Code, except a club holding an alcoholic beverage license pursuant to Section 23425 thereof, shall provide on each receipt furnished to a taxpayer a printed statement as follows: “The expenditures covered by this receipt are nondeductible for state income tax purposes or franchise tax purposes.” (c) For purposes of this section: (1) “Expenses” means those expenses otherwise deductible under Section 162(a) of the Internal Revenue Code, except for subdivision (a), and includes, but is not limited to, club membership dues and assessments, food and beverage expenses, expenses for services furnished by the club, and reimbursements or salary adjustments to officers or employees for any of the preceding expenses. (2) “Club” means a club as defined in Division 9 (commencing with Section 23000) of the Business and Professions Code, except a club as defined in Section 23425 thereof. (Amended by Stats. 2011, Ch. 261, Sec. 22. (SB 559) Effective January 1, 2012.)
  187. 17270.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section changes how certain federal tax rules apply for California purposes, including treating a legislator’s residence in the represented district as the tax home.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17270. (a) For purposes of Section 162(a)(2) of the Internal Revenue Code, relating to travel expenses, all of the following shall apply: (1) The place of residence of a member of the Legislature within the district represented shall be considered the tax home. (2) The provisions of Section 162(h) of the Internal Revenue Code, relating to state legislators’ travel expenses away from home, shall not be applied. (b) The provisions of Section 280C(a) of the Internal Revenue Code (relating to rule for employment credits) shall not apply. (c) The amendments made by Section 13206(d)(2)(A) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 280C(c) of the Internal Revenue Code, relating to credit for increasing research activities, shall not apply, except as otherwise provided. (d) Section 280C(c)(2)(B) of the Internal Revenue Code, as enacted pursuant to Section 13206(d)(2)(A) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), is modified to refer to Section 17041 in lieu of Section 11(b) of the Internal Revenue Code. (Amended by Stats. 2025, Ch. 231, Sec. 40. (SB 711) Effective October 1, 2025.)
  188. 17271.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section applies certain federal tax amendments about binding contracts, with one date changed, and says another federal covered-employee rule does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17271. (a) The amendments made to Section 162(m) of the Internal Revenue Code by Section 13601(e)(2) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to exception for binding contracts, shall apply, and is modified by substituting “March 31, 2019” for “November 2, 2017.” (b) Section 162(m)(3)(C) of the Internal Revenue Code, relating to covered employee, shall not apply. (Amended by Stats. 2025, Ch. 231, Sec. 41. (SB 711) Effective October 1, 2025.)
  189. 17273.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    For taxable years beginning on or after January 1, 1999, this section changes how the federal applicable-percentage rule works so that the cited 1998 tax relief provision applies.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17273. For each taxable year beginning on or after January 1, 1999, Section 162(l)(1) of the Internal Revenue Code, relating to applicable percentage, is modified to provide that Section 2002 of the Tax and Trade Relief Extension Act of 1998 (P.L. 105-277), relating to phase in of a 100-percent deduction for health insurance, shall apply. (Amended by Stats. 1999, Ch. 146, Sec. 23.5. Effective July 22, 1999.)
  190. 17274.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section generally denies a tax deduction for certain expenses tied to substandard housing in California, unless an exception applies.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17274. (a) Notwithstanding any other provisions in this part to the contrary, no deduction shall be allowed for interest, taxes, depreciation, or amortization paid or incurred in the taxable year with respect to substandard housing located in this state, except as provided in subdivision (e). (b) “Substandard housing” means occupied dwellings from which the taxpayer derives rental income or unoccupied or abandoned dwellings for which both of the following apply: (1) Either of the following occurs: (A) For occupied dwellings from which the taxpayer derives rental income, a state or local government regulatory agency has determined that the housing violates state law or local codes dealing with health, safety, or building. (B) For dwellings that are unoccupied or abandoned for at least 90 days, a state or local government regulatory agency has cited the housing for conditions that constitute a serious violation of state law or local codes dealing with health, safety, or building, and that constitute a threat to public health and safety. (2) Either of the following occurs: (A) After written notice of violation by the regulatory agency, specifying the applicability of this section, the housing has not been brought to a condition of compliance within six months after the date of the notice or the time prescribed in the notice, whichever period is later. (B) Good faith efforts for compliance have not been commenced, as determined by the regulatory agency. “Substandard housing” also means employee housing that has not, within 30 days of the date of the written notice of violation or the date for compliance prescribed in the written notice of violation, been brought into compliance with the conditions stated in the written notice of violation of the Employee Housing Act (Part 1 (commencing with Section 17000) of Division 13 of the Health and Safety Code) issued by the enforcement agency that specifies the application of this section. The regulatory agency may, for good cause shown, extend the compliance date prescribed in a violation notice. (c) (1) When the period specified in paragraph (2) of subdivision (b) has expired without compliance, the regulatory agency shall mail to the taxpayer a notice of noncompliance. The notice of noncompliance shall be in a form and shall include information prescribed by the Franchise Tax Board, shall be mailed by certified mail to the taxpayer at the taxpayer’s last known address, and shall advise the taxpayer of (A) an intent to notify the Franchise Tax Board of the noncompliance within 10 days unless an appeal is filed, (B) where an appeal may be filed, and (C) a general description of the tax consequences of the filing with the Franchise Tax Board. Appeals shall be made to the same body and in the same manner as appeals from other actions of the regulatory agency. If no appeal is made within 10 days or if after disposition of the appeal the regulatory agency is sustained, the regulatory agency shall notify, in writing, the Franchise Tax Board of the noncompliance. (2) The notice of noncompliance shall contain the legal description or the lot and block numbers of the real property, the assessor’s parcel number, and the name of the owner of record as shown on the latest equalized assessment roll. In addition, the regulatory agency shall, at the same time as notification of the notice of noncompliance is sent to the Franchise Tax Board, record a copy of the notice of noncompliance in the office of the recorder for the county in which the substandard housing is located that includes a statement of tax consequences that may be determined by the Franchise Tax Board. However, the failure to record a notice with the county recorder does not relieve the liability of any taxpayer nor does it create any liability on the part of the regulatory agency. (3) The regulatory agency may charge the taxpayer a fee in an amount not to exceed the regulatory agency’s costs incurred in recording any notice of noncompliance or issuing any release of that notice. The notice of compliance shall be recorded and shall serve to expunge the notice of noncompliance. The notice of compliance shall contain the same recording information required for the notice of noncompliance. No deduction by the taxpayer, or any other taxpayer who obtains title to the property subsequent to the recordation of the notice of noncompliance, shall be allowed for the items provided in subdivision (a) from the date of the notice of noncompliance until the date the regulatory agency determines that the substandard housing has been brought to a condition of compliance. The regulatory agency shall mail to the Franchise Tax Board and the taxpayer a notice of compliance, which notice shall be in the form and include the information prescribed by the Franchise Tax Board. In the event the period of noncompliance does not cover an entire taxable year, the deductions shall be denied at the rate of 1/12 for each full month during the period of noncompliance. (4) If the property is owned by more than one owner or if the recorded title is in the name of a fictitious owner, the notice requirements provided in subdivision (b) and this subdivision shall be satisfied for each owner if the notices are mailed to one owner or to the fictitious name owner at the address appearing on the latest available property tax bill. However, notices made pursuant to this subdivision do not relieve the regulatory agency from furnishing taxpayer identification information required to implement this section to the Franchise Tax Board. (d) For the purposes of this section, a notice of noncompliance shall not be mailed by the regulatory agency to the Franchise Tax Board if any of the following occur: (1) The housing was rendered substandard solely by reason of earthquake, flood, or other natural disaster except where the condition remains for more than three years after the disaster. (2) The owner of the substandard housing has secured financing to bring the housing into compliance with those laws or codes that have been violated, causing the housing to be classified as substandard, and has commenced repairs or other work necessary to bring the housing into compliance. (3) The owner of substandard housing that is not within the meaning of housing accommodation as defined by subdivision (d) of Section 35805 of the Health and Safety Code has done both of the following: (A) Attempted to secure financing to bring the housing into compliance with those laws or codes that have been violated, causing the housing to be classified as substandard. (B) Been denied that financing solely because the housing is located in a neighborhood or geographical area in which financial institutions do not provide financing for rehabilitation of any of that type of housing. (e) This section does not apply to deductions from income derived from property rendered substandard solely by reason of a change in applicable state or local housing standards unless the violations cause substantial danger to the occupants of the property, as determined by the regulatory agency which has served notice of violation pursuant to subdivision (b). (f) The owner of substandard housing found to be in noncompliance shall, upon total or partial divestiture of interest in the property, immediately notify the regulatory agency of the name and address of the person or persons to whom the property has been sold or otherwise transferred and the date of the sale or transference. (g) By July 1 of each year, the regulatory agency shall report to the appropriate legislative body of its jurisdiction all of the following information, for the preceding calendar year, regarding its activities to secure code enforcement, which shall be public information: (1) The number of written notices of violation issued for substandard housing under subdivision (b). (2) The number of violations complied with within the period prescribed in subdivision (b). (3) The number of notices of noncompliance issued pursuant to subdivision (c). (4) The number of appeals from those notices pursuant to subdivision (c). (5) The number of successful appeals by owners. (6) The number of notices of noncompliance mailed to the Franchise Tax Board pursuant to subdivision (c). (7) The number of cases in which a notice of noncompliance was not sent pursuant to subdivision (d). (8) The number of extensions for compliance granted pursuant to subdivision (b) and the mean average length of the extensions. (9) The mean average length of time from the issuance of a notice of violation to the mailing of a notice of noncompliance to the Franchise Tax Board where the notice is actually sent to the Franchise Tax Board. (10) The number of cases where compliance is achieved after a notice of noncompliance has been mailed to the Franchise Tax Board. (11) The number of instances of disallowance of tax deductions by the Franchise Tax Board resulting from referrals made by the regulatory agency. This information may be filed in a supplemental report in succeeding years as it becomes available. (h) The provisions of this section relating to substandard housing consisting of abandoned or unoccupied dwellings do not apply to any lender engaging in a “federally related transaction,” as defined in Section 11302 of the Business and Professions Code, who acquires title through judicial or nonjudicial foreclosure, or accepts a deed in lieu of foreclosure. The exception provided in this subdivision covers only substandard housing consisting of abandoned or unoccupied dwellings involved in the federally related transaction. (Amended by Stats. 1999, Ch. 987, Sec. 31. Effective October 10, 1999.)
  191. 17275.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    When computing taxable income, no deduction is allowed for abandonment fees or tax recoupment fees paid under the specified Government Code sections.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17275. In computing taxable income, no deduction shall be allowed for any of the following: (a) Abandonment fees paid under Section 51061 or 51093 of the Government Code. (b) Tax recoupment fees paid under Section 51142 of the Government Code. (Added by Stats. 1983, Ch. 488, Sec. 29. Effective July 28, 1983.)
  192. 17275.2.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says the federal rule in IRC Section 170(e)(3)(C) for contributions of food inventory does not apply.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17275.2. Section 170(e)(3)(C) of the Internal Revenue Code, relating to special rule for contributions of food inventory, shall not apply. (Added by Stats. 2010, Ch. 14, Sec. 25. (SB 401) Effective January 1, 2011.)
  193. 17275.4.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    Certain taxpayers may not claim specified charitable-contribution and business-expense deductions if they meet the listed criminal-case conditions.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17275.4. (a) For taxable years beginning on or after January 1, 2014, a deduction for a charitable contribution to an educational organization that is a postsecondary institution or to the Key Worldwide Foundation, pursuant to Section 170 of the Internal Revenue Code, relating to charitable, etc., contributions and gifts, and a deduction for a business expense related to a payment to the Edge College and Career Network, LLC, pursuant to Section 162 of the Internal Revenue Code, relating to trade or business expenses, shall not be allowed to a taxpayer who meets all of the following conditions: (1) They are charged as a defendant in any of the following criminal complaints filed in the United States District Court for the District of Massachusetts: (A) Criminal Complaint #19-CR-10081-IT. (B) Criminal Complaint #19-CR-10078-RWZ. (C) Criminal Complaint #19-CR-10075-MLW. (D) Criminal Complaint #19-CR-10074-NMG. (E) Criminal Complaint #19-cr-10079-RWZ. (F) Criminal Complaint #1:19-cr-10117. (G) Criminal Complaint #1:19-cr-10115. (H) Criminal Complaint #19-cr-10131. (I) Criminal Complaint #1:19-cr-10116. (J) Criminal Complaint #1-19-cr-10080. (2) There is a final determination of their guilt with regard to a violation of any offense of Title 18 of the United States Code arising out of that criminal complaint. (3) There is a finding that they took the deduction unlawfully pursuant to the final determination of guilt described in paragraph (2), or pursuant to a determination by the Franchise Tax Board. (b) For purposes of this section, “final determination of guilt” means that the defendant has been convicted by verdict of a jury, accepted and recorded by the court, by a finding of the court in a case where a jury has been waived, or by a plea of guilty, and that the defendant has exhausted all appellate remedies. (Added by Stats. 2019, Ch. 511, Sec. 2. (AB 136) Effective October 4, 2019.)
  194. 17275.5.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section limits or disapplies several Internal Revenue Code provisions for California income tax deductions and appraisals, and it applies one federal amendment rule to contributions made on or after January 1, 2024.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17275.5. (a) No deduction shall be denied under Section 170(f)(8) of the Internal Revenue Code, relating to substantiation requirement for certain contributions, upon a showing that the requirements in Section 170(f)(8) of the Internal Revenue Code have been met with respect to that contribution for federal purposes. (b) Section 170(f)(10)(F) of the Internal Revenue Code, relating to excise tax on premiums paid, shall not apply. (c) The provisions of Section 170(f)(11)(E) of the Internal Revenue Code, relating to qualified appraisal and appraiser, shall apply to appraisals prepared with respect to returns or submissions filed on or after January 1, 2010. (d) Section 170(f)(13) of the Internal Revenue Code, relating to contributions of certain interests in buildings located in registered historic districts, shall not apply. (e) Section 170(f)(18) of the Internal Revenue Code, relating to contributions to donor advised funds, shall not apply. (f) For contributions made on or after January 1, 2024, the amendments made by Section 605(b) of Public Law 117-328 adding paragraph (19) to Section 170(f) of the Internal Revenue Code, relating to certain qualified conservation contributions, shall apply. (Amended by Stats. 2024, Ch. 34, Sec. 21. (SB 167) Effective June 27, 2024.)
  195. 17275.6.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section says certain federal tax law amendments apply in California for contributions made on or after January 1, 2024, with one federal subsection excluded and another amendment modified.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17275.6. (a) For contributions made on or after January 1, 2024, the amendments made by Section 605(a)(1) of Public Law 117-328 adding paragraph (7) to Section 170(h) of the Internal Revenue Code, relating to limitation on deduction for qualified conservation contributions made by passthrough entities, shall apply, except as otherwise provided. (b) Section 170(h)(7)(G) of the Internal Revenue Code, relating to regulations, as added by Section 605(a)(1) of Public Law 117-328, shall not apply. (c) For contributions made on or after January 1, 2024, the amendments made by Section 605(a)(3) of Public Law 117-328, relating to extension of statute of limitations for listed transactions, shall apply and are modified by substituting “Section 19755” for “sections 6501(c)(10) and 6235(c)(6) of such Code.” (d) Section 605(d)(2) of Public Law 117-328, relating to opportunity to correct, shall apply. (Added by Stats. 2024, Ch. 34, Sec. 22. (SB 167) Effective June 27, 2024.)
  196. 17276.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section modifies how net operating loss deductions, carrybacks, and carryforwards work, including special rules for new businesses, eligible small businesses, and the Franchise Tax Board’s regulatory powers.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276. Except as provided in Sections 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, and 17276.7, the deduction provided by Section 172 of the Internal Revenue Code, relating to net operating loss deduction, shall be modified as follows: (a) (1) Net operating losses attributable to taxable years beginning before January 1, 1987, shall not be allowed. (2) A net operating loss shall not be carried forward to any taxable year beginning before January 1, 1987. (3) The amendments made by Section 13302(a)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) and Section 2303(a)(1) of the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136) to Section 172(a) of the Internal Revenue Code, relating to the deduction allowed, shall not apply. (b) (1) Except as provided in paragraphs (3) and (4), the provisions of Section 172(b)(2) of the Internal Revenue Code, relating to amount of carrybacks and carryovers, shall be modified so that the applicable percentage of the entire amount of the net operating loss for any taxable year shall be eligible for carryover to any subsequent taxable year. For purposes of this subdivision, the applicable percentage shall be: (A) Fifty percent for any taxable year beginning before January 1, 2000. (B) Fifty-five percent for any taxable year beginning on or after January 1, 2000, and before January 1, 2002. (C) Sixty percent for any taxable year beginning on or after January 1, 2002, and before January 1, 2004. (D) One hundred percent for any taxable year beginning on or after January 1, 2004. (2) Section 172(b)(2)(C) of the Internal Revenue Code shall not apply. (3) In the case of a taxpayer who has a net operating loss in any taxable year beginning on or after January 1, 1994, and who operates a new business during that taxable year, each of the following shall apply to each loss incurred during the first three taxable years of operating the new business: (A) If the net operating loss is equal to or less than the net loss from the new business, 100 percent of the net operating loss shall be carried forward as provided in subdivision (d). (B) If the net operating loss is greater than the net loss from the new business, the net operating loss shall be carried over as follows: (i) With respect to an amount equal to the net loss from the new business, 100 percent of that amount shall be carried forward as provided in subdivision (d). (ii) With respect to the portion of the net operating loss that exceeds the net loss from the new business, the applicable percentage of that amount shall be carried forward as provided in subdivision (d). (C) For purposes of Section 172(b)(2) of the Internal Revenue Code, the amount described in clause (ii) of subparagraph (B) shall be absorbed before the amount described in clause (i) of subparagraph (B). (4) In the case of a taxpayer who has a net operating loss in any taxable year beginning on or after January 1, 1994, and who operates an eligible small business during that taxable year, each of the following shall apply: (A) If the net operating loss is equal to or less than the net loss from the eligible small business, 100 percent of the net operating loss shall be carried forward to the taxable years specified in subdivision (d). (B) If the net operating loss is greater than the net loss from the eligible small business, the net operating loss shall be carried over as follows: (i) With respect to an amount equal to the net loss from the eligible small business, 100 percent of that amount shall be carried forward as provided in subdivision (d). (ii) With respect to that portion of the net operating loss that exceeds the net loss from the eligible small business, the applicable percentage of that amount shall be carried forward as provided in subdivision (d). (C) For purposes of Section 172(b)(2) of the Internal Revenue Code, the amount described in clause (ii) of subparagraph (B) shall be absorbed before the amount described in clause (i) of subparagraph (B). (5) In the case of a taxpayer who has a net operating loss in a taxable year beginning on or after January 1, 1994, and who operates a business that qualifies as both a new business and an eligible small business under this section, that business shall be treated as a new business for the first three taxable years of the new business. (6) In the case of a taxpayer who has a net operating loss in a taxable year beginning on or after January 1, 1994, and who operates more than one business, and more than one of those businesses qualifies as either a new business or an eligible small business under this section, paragraph (2) shall be applied first, except that if there is any remaining portion of the net operating loss after application of clause (i) of subparagraph (B) of that paragraph, paragraph (3) shall be applied to the remaining portion of the net operating loss as though that remaining portion of the net operating loss constituted the entire net operating loss. (7) For purposes of this section, the term “net loss” means the amount of net loss after application of Sections 465 and 469 of the Internal Revenue Code. (c) Section 172(b)(1) of the Internal Revenue Code, relating to years to which the loss may be carried, is modified as follows: (1) Net operating loss carrybacks shall not be allowed for any net operating losses attributable to taxable years beginning after December 31, 2018, and before January 1, 2013. (2) A net operating loss attributable to taxable years beginning on or after January 1, 2013, and before January 1, 2019, shall be a net operating loss carryback to each of the two taxable years preceding the taxable year of the loss in lieu of the number of years provided therein. (A) For a net operating loss attributable to a taxable year beginning on or after January 1, 2013, and before January 1, 2014, the amount of carryback to any taxable year shall not exceed 50 percent of the net operating loss. (B) For a net operating loss attributable to a taxable year beginning on or after January 1, 2014, and before January 1, 2015, the amount of carryback to any taxable year shall not exceed 75 percent of the net operating loss. (C) For a net operating loss attributable to a taxable year beginning on or after January 1, 2015, and before January 1, 2019, the amount of carryback to any taxable year shall not exceed 100 percent of the net operating loss. (3) A net operating loss carryback shall not be carried back to any taxable year beginning before January 1, 2011. (d) (1) (A) For a net operating loss for any taxable year beginning on or after January 1, 1987, and before January 1, 2000, Section 172(b)(1)(A)(ii) of the Internal Revenue Code shall apply as it read on January 1, 2015, and is modified to substitute “five taxable years” in lieu of “20 taxable years” except as otherwise provided in paragraphs (2) and (3). (B) For a net operating loss for any taxable year beginning on or after January 1, 2000, and before January 1, 2008, Section 172(b)(1)(A)(ii)(I) of the Internal Revenue Code is modified to substitute “10 taxable years” in lieu of “20 taxable years.” (C) Section 172(b)(1)(A) of the Internal Revenue Code, relating to years to which loss may be carried, shall not apply. (D) Section 172(b)(1)(D) of the Internal Revenue Code, relating to special rule for losses arising in 2018, 2019, and 2020, shall not apply. (2) For any taxable year beginning before January 1, 2000, in the case of a “new business,” the “five taxable years” in paragraph (1) shall be modified to read as follows: (A) “Eight taxable years” for a net operating loss attributable to the first taxable year of that new business. (B) “Seven taxable years” for a net operating loss attributable to the second taxable year of that new business. (C) “Six taxable years” for a net operating loss attributable to the third taxable year of that new business. (3) For any carryover of a net operating loss for which a deduction is denied by Section 17276.3, the carryover period specified in this subdivision shall be extended as follows: (A) By one year for a net operating loss attributable to taxable years beginning in 1991. (B) By two years for a net operating loss attributable to taxable years beginning before January 1, 1991. (4) The net operating loss attributable to taxable years beginning on or after January 1, 1987, and before January 1, 1994, shall be a net operating loss carryover to each of the 10 taxable years following the year of the loss if it is incurred by a taxpayer that is under the jurisdiction of the court in a Title 11 or similar case at any time during the income year. The loss carryover provided in the preceding sentence does not apply to any loss incurred after the date the taxpayer is no longer under the jurisdiction of the court in a Title 11 or similar case. (e) For purposes of this section: (1) “Eligible small business” means any trade or business that has gross receipts, less returns and allowances, of less than one million dollars ($1,000,000) during the taxable year. (2) Except as provided in subdivision (f), “new business” means any trade or business activity that is first commenced in this state on or after January 1, 1994. (3) “Title 11 or similar case” shall have the same meaning as in Section 368(a)(3) of the Internal Revenue Code. (4) In the case of any trade or business activity conducted by a partnership or “S” corporation paragraphs (1) and (2) shall be applied to the partnership or “S” corporation. (f) For purposes of this section, in determining whether a trade or business activity qualifies as a new business under paragraph (2) of subdivision (e), the following rules apply: (1) In any case where a taxpayer purchases or otherwise acquires all or any portion of the assets of an existing trade or business (irrespective of the form of entity) that is doing business in this state (within the meaning of Section 23101), the trade or business thereafter conducted by the taxpayer (or any related person) shall not be treated as a new business if the aggregate fair market value of the acquired assets (including real, personal, tangible, and intangible property) used by the taxpayer (or any related person) in the conduct of its trade or business exceeds 20 percent of the aggregate fair market value of the total assets of the trade or business being conducted by the taxpayer (or any related person). For purposes of this paragraph only, the following rules apply: (A) The determination of the relative fair market values of the acquired assets and the total assets shall be made as of the last day of the first taxable year in which the taxpayer (or any related person) first uses any of the acquired trade or business assets in its business activity. (B) Acquired assets that constituted property described in Section 1221(a)(1) of the Internal Revenue Code in the hands of the transferor shall not be treated as assets acquired from an existing trade or business, unless those assets also constitute property described in Section 1221(a)(1) of the Internal Revenue Code in the hands of the acquiring taxpayer (or related person). (2) In a case in which a taxpayer (or any related person) is engaged in one or more trade or business activities in this state, or has been engaged in one or more trade or business activities in this state within the preceding 36 months (“prior trade or business activity”), and thereafter commences an additional trade or business activity in this state, the additional trade or business activity shall only be treated as a new business if the additional trade or business activity is classified under a different division of the Standard Industrial Classification (SIC) Manual published by the United States Office of Management and Budget, 1987 edition, than are any of the taxpayer’s (or any related person’s) current or prior trade or business activities. (3) In a case in which a taxpayer, including all related persons, is engaged in trade or business activities wholly outside of this state and the taxpayer first commences doing business in this state (within the meaning of Section 23101) after December 31, 1993 (other than by purchase or other acquisition described in paragraph (1)), the trade or business activity shall be treated as a new business under paragraph (2) of subdivision (e). (4) In a case in which the legal form under which a trade or business activity is being conducted is changed, the change in form shall be disregarded and the determination of whether the trade or business activity is a new business shall be made by treating the taxpayer as having purchased or otherwise acquired all or any portion of the assets of an existing trade or business under the rules of paragraph (1). (5) “Related person” shall mean any person that is related to the taxpayer under either Section 267 or 318 of the Internal Revenue Code. (6) “Acquire” shall include any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration. (7) (A) For taxable years beginning on or after January 1, 1997, the term “new business” shall include any taxpayer that is engaged in biopharmaceutical activities or other biotechnology activities that are described in Codes 2833 to 2836, inclusive, of the Standard Industrial Classification (SIC) Manual published by the United States Office of Management and Budget, 1987 edition, and as further amended, and that has not received regulatory approval for any product from the Food and Drug Administration. (B) For purposes of this paragraph: (i) “Biopharmaceutical activities” means those activities that use organisms or materials derived from organisms, and their cellular, subcellular, or molecular components, in order to provide pharmaceutical products for human or animal therapeutics and diagnostics. Biopharmaceutical activities make use of living organisms to make commercial products, as opposed to pharmaceutical activities that make use of chemical compounds to produce commercial products. (ii) “Other biotechnology activities” means activities consisting of the application of recombinant DNA technology to produce commercial products, as well as activities regarding pharmaceutical delivery systems designed to provide a measure of control over the rate, duration, and site of pharmaceutical delivery. (g) Notwithstanding any provisions of this section to the contrary, a deduction shall be allowed to a “qualified taxpayer” as provided in Sections 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, and 17276.7. (h) The Franchise Tax Board may prescribe appropriate regulations to carry out the purposes of this section, including any regulations necessary to prevent the avoidance of the purposes of this section through splitups, shell corporations, partnerships, tiered ownership structures, or otherwise. (i) The Franchise Tax Board may reclassify any net operating loss carryover determined under either paragraph (2) or (3) of subdivision (b) as a net operating loss carryover under paragraph (1) of subdivision (b) upon a showing that the reclassification is necessary to prevent evasion of the purposes of this section. (j) Except as otherwise provided, the amendments made by Chapter 107 of the Statutes of 2000 apply to net operating losses for taxable years beginning on or after January 1, 2000. (Amended by Stats. 2025, Ch. 231, Sec. 43. (SB 711) Effective October 1, 2025.)
  197. 17276.1.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A qualified taxpayer may elect a net operating loss deduction, but the election must be made in a statement attached to the timely filed original return and is irrevocable.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.1. (a) A qualified taxpayer, as defined in Section 17276.2, 17276.4, 17276.5, 17276.6, or 17276.7, may elect to take the deduction provided by Section 172 of the Internal Revenue Code, relating to the net operating loss deduction, as modified by Section 17276, with the following exceptions: (1) Subdivision (a) of Section 17276, relating to years in which allowable losses are sustained, shall not be applicable. (2) Subdivision (b) of Section 17276, relating to the 50-percent reduction of losses, shall not be applicable. (b) The election to compute the net operating loss under this section shall be made in a statement attached to the original return, timely filed for the year in which the net operating loss is incurred and shall be irrevocable. In addition to the exceptions specified in subdivision (a), the provisions of Section 17276.2, 17276.4, 17276.5, 17276.6, or 17276.7, as appropriate, shall be applicable. (c) Any carryover of a net operating loss sustained by a qualified taxpayer, as defined in subdivision (a) or (b) of Section 17276.2 as that section read immediately prior to January 1, 1997, shall, if previously elected, continue to be a deduction, as provided in subdivision (a), applied as if the provisions of subdivision (a) or (b) of Section 17276.2, as that section read prior to January 1, 1997, still applied. (Amended by Stats. 2001, Ch. 623, Sec. 2. Effective October 9, 2001.)
  198. 17276.21.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    This section disallows the net operating loss deduction for taxable years beginning between January 1, 2008 and January 1, 2012, with some carryover extensions and later carryback allowance.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.21. (a) Notwithstanding Sections 17276, 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, and 17276.7 of this code and Section 172 of the Internal Revenue Code, no net operating loss deduction shall be allowed for any taxable year beginning on or after January 1, 2008, and before January 1, 2012. (b) For any net operating loss or carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows: (1) By one year, for losses incurred in taxable years beginning on or after January 1, 2010, and before January 1, 2011. (2) By two years, for losses incurred in taxable years beginning on or after January 1, 2009, and before January 1, 2010. (3) By three years, for losses incurred in taxable years beginning on or after January 1, 2008, and before January 1, 2009. (4) By four years, for losses incurred in taxable years beginning before January 1, 2008. (c) Notwithstanding subdivision (a), a net operating loss deduction shall be allowed for carryback of a net operating loss attributable to a taxable year beginning on or after January 1, 2013, and before January 1, 2019. (d) The provisions of this section do not apply to the following taxpayers: (1) For a taxable year beginning on or after January 1, 2008, and before January 1, 2010, this section does not apply to a taxpayer with net business income of less than five hundred thousand dollars ($500,000) for the taxable year. For purposes of this paragraph, business income means: (A) Income from a trade or business, whether conducted by the taxpayer or by a passthrough entity owned directly or indirectly by the taxpayer. For purposes of this paragraph, the term “passthrough entity” means a partnership or an “S” corporation. (B) Income from rental activity. (C) Income attributable to a farming business. (2) For a taxable year beginning on or after January 1, 2010, and before January 1, 2012, this section does not apply to a taxpayer with modified adjusted gross income of less than three hundred thousand dollars ($300,000) for the taxable year. For purposes of this paragraph, “modified adjusted gross income” means the amount described in paragraph (2) of subdivision (h) of Section 17024.5, determined without regard to the deduction allowed under Section 172 of the Internal Revenue Code, relating to net operating loss deduction. (Amended by Stats. 2019, Ch. 39, Sec. 11. (AB 91) Effective July 1, 2019.)
  199. 17276.22.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A qualifying net operating loss may be carried forward for 20 taxable years, and losses from taxable years starting between January 1, 2013 and January 1, 2019 may also be carried back for two taxable years.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.22. Notwithstanding Section 17276.1, 17276.2, 17276.4, 17276.5, 17276.6, or 17276.7 to the contrary, a net operating loss attributable to a taxable year beginning on or after January 1, 2008, shall be a net operating carryover to each of the 20 taxable years following the year of the loss, and a net operating loss attributable to a taxable year beginning on or after January 1, 2013, and before January 1, 2019, shall also be a net operating loss carryback to each of the two taxable years preceding the taxable year of loss. (Amended by Stats. 2019, Ch. 39, Sec. 12. (AB 91) Effective July 1, 2019.)
  200. 17276.23.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. )

    Verify source ↗

    A taxpayer generally may not claim a net operating loss deduction for tax years beginning between January 1, 2020 and January 1, 2022, unless an income threshold exception applies.

    ## Revenue and Taxation Code - RTC ## DIVISION 2. OTHER TAXES [6001 - 61050] ( Heading of Division 2 amended by Stats. 1968, Ch. 279. ) ## PART 10. PERSONAL INCOME TAX [17001 - 18181] ( Part 10 added by Stats. 1943, Ch. 659. ) ## CHAPTER 3. Computation of Taxable Income [17071 - 17307] ( Chapter 3 repealed and added by Stats. 1955, Ch. 939. ) ## ARTICLE 6. Deductions [17201 - 17299.9] ( Article 6 repealed and added by Stats. 1983, Ch. 488, Sec. 29. ) ## 17276.23. (a) Notwithstanding Sections 17276, 17276.1, 17276.4, 17276.7, and 17276.22, former Sections 17276.2, 17276.5, 17276.6, and 17276.20, and Section 172 of the Internal Revenue Code, a net operating loss deduction shall not be allowed for any taxable year beginning on or after January 1, 2020, and before January 1, 2022. (b) For any net operating loss or carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows: (1) By one year, for losses incurred in taxable years beginning on or after January 1, 2021, and before January 1, 2022. (2) By two years, for losses incurred in taxable years beginning on or after January 1, 2020, and before January 1, 2021. (3) By three years, for losses incurred in taxable years beginning before January 1, 2020. (c) This section shall not apply as follows: (1) For a taxable year beginning on or after January 1, 2020, and before January 1, 2022, this section shall not apply to a taxpayer with a net business income of less than one million dollars ($1,000,000) for the taxable year. (2) For a taxable year beginning on or after January 1, 2020, and before January 1, 2022, this section shall not apply to a taxpayer with a modified adjusted gross income of less than one million dollars ($1,000,000) for the taxable year. (d) For purposes of this section: (1) “Business income” means any of the following: (A) Income from a trade or business, whether conducted by the taxpayer or by a passthrough entity owned directly or indirectly by the taxpayer. (B) Income from rental activity. (C) Income attributable to a farming business. (2) “Modified adjusted gross income” means the amount described in paragraph (2) of subdivision (h) of Section 17024.5, determined without regard to the deduction allowed under Section 172 of the Internal Revenue Code, relating to net operating loss deduction. (3) “Passthrough entity” means a partnership or an S corporation. (e) The amendments made to this section by the act adding this subdivision shall be operative for taxable years beginning on or after January 1, 2022. (Amended by Stats. 2022, Ch. 3, Sec. 13. (SB 113) Effective February 9, 2022.)

Provision text is displayed from LexChat’s stored statute record. Use the official source links to verify amendments, commencement, and current legal force.

LexChat organizes source-backed legal information for research. Verify amendments, commencement, and current legal force with the official publisher before relying on it.