Bill Text: CA AB2459 | 2017-2018 | Regular Session | Amended

California Assembly Bill 2459 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Personal income taxes: credits: health insurance premiums.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed - Dead) 2018-08-16 - In committee: Held under submission. [AB2459 Detail]

Download: California-2017-AB2459-Amended.html

Amended IN Assembly April 11, 2018

Amended IN Assembly March 23, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 2459

Introduced by Assembly Member Friedman
(Coauthors: Assembly Members Arambula, Wood, and Chiu)

February 14, 2018

An act to add Section 17052.10 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2459, as amended, Friedman. Personal income taxes: credits: health insurance premiums.

The Personal Income Tax Law allows various credits against the taxes imposed by that law.

This bill, for each taxable year beginning on or after January 1, 2019, would allow a credit under the Personal Income Tax Law in an amount equal to the cost of health insurance premiums for the lowest cost bronze plan for the qualified individual or the qualified individual’s dependent that exceeds ~~____%~~ 8% of the qualified individual’s modified adjusted gross income, as specified. If the allowed credit amount exceeds tax liability, the bill would also allow a payment in excess of that credit amount upon appropriation by the Legislature.

This bill would take effect immediately as a tax levy.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

(a) The Legislature finds and declares that Medicare, Medicaid, employer coverage, and the Affordable Care Act provide most Californians with access to health care coverage that meets minimum standards of affordability.

(b) The Legislature further finds and declares that while, under existing state and federal law, most Californians are assured that their health insurance premiums will cost no more than 10 percent of their income, some Californians who buy coverage as individuals may face health insurance premiums that exceed 10 percent of income for coverage that pays on average 60 percent of the cost of care.

(c) It is the intent of the Legislature in enacting this legislation that no California taxpayer who buys coverage as an individual will spend more than ~~____~~ 8 percent of his or her income on health insurance premiums. It is further the intent of the Legislature that those with incomes that exceed the threshold for federal advance premium tax credits through Covered California shall be able to claim a credit pursuant to Section 17052.10 of the Revenue and Taxation Code, as added by this bill, on their income tax returns.

SEC. 2.

Section 17052.10 is added to the Revenue and Taxation Code, to read:

17052.10.

(a) (1) For each taxable year beginning on or after January 1, 2019, there shall be allowed to a qualified individual a health insurance premium credit against the “net tax,” as defined by Section 17039, in an amount determined pursuant to paragraph (2).

(2) The credit shall be equal to the cost of health insurance premiums for the lowest cost bronze plan for the qualified individual or the qualified individual’s dependent that exceeds ~~____~~ 8 percent of the qualified individual’s modified adjusted gross income.

(b) For purposes of this section:

(1) “Bronze plan” has the same meaning as “bronze level,” as defined in Section 1367.008 of the Health and Safety Code.

(2) “Individual market” means an individual market described in either Article 11.8 (commencing with Section 1399.845) of Chapter 2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code or Chapter 9.9 (commencing with Section 10965) of Part 2 of Division 2 of the Insurance Code.

(3) “Lowest cost bronze plan” means the lowest cost bronze plan available to the qualified individual or the qualified individual’s dependent, given the age and geographic region of the individual covered by the health care coverage.

(4) “Modified adjusted gross income” has the same meaning as in Section 36B(d)(2)(B) of the Internal Revenue Code, relating to modified adjusted gross income.

(5) (A) “Qualified individual” means a person who purchased health care coverage in the individual market for himself or herself or for a dependent, if that coverage is a standardized benefit design approved by Covered California pursuant to subdivision (c) of Section 100504 of the Government Code.

(B) A “qualified individual” does not include an individual who, or whose dependent for which the credit is claimed, is otherwise eligible for minimum essential coverage through employment, Medicare, Medicaid, or other public programs. For purposes of this subparagraph, “minimum essential coverage through employment” means affordable employer coverage of minimum value, as provided in the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152), and any rules and regulations promulgated thereunder.

(c) If the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall, upon appropriation by the Legislature, be refunded to the qualified individual.

(d) Section 41 does not apply to the credit allowed by this section.