Personal Income Tax Law: credits: insurance.
AB 1354
California Bills
20250AB__135498AMD INTRODUCED 2025-02-21 AMENDED_ASSEMBLY 2025-04-28 2025 AB AMD Introduced by Assembly Members Wallis and Flora LEAD_AUTHOR ASSEMBLY Wallis LEAD_AUTHOR ASSEMBLY Flora
An act to add and repeal
Section 17053.84 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. taxation, to take effect immediately, tax levy Personal Income Tax Law: credits: insurance. The Personal Income Tax Law allows various credits against the tax imposed by that law.
This bill would, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, allow a credit against that tax to a qualified taxpayer, as defined, equal to the amount paid during the taxable year for premium payments made by the taxpayer for a policy of residential property insurance, as defined, minus the base year premium, defined as the premium paid by the taxpayer for a fire insurance policy in the calendar year.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy. MAJORITY NO YES NO YES NO YES NO NO NO NO The people of the State of California do enact as follows:
SECTION
Section 17053.84 is added to the Revenue and Taxation Code , to read: 17053.84. (a)
(1) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed a fire insurance credit against the “net tax,” as defined in
Section 17039, to a qualified taxpayer, in an amount calculated pursuant to paragraph (2).
(2) The amount of the credit allowed by paragraph (1) shall be equal to the sum of the following: (
A) The amount of premium paid or incurred by a taxpayer for a policy of residential property insurance on a qualified residential property under
Chapter 2 (commencing with
Section 2030) of Part of Division of the Insurance Code in the taxable year minus the base year premium. (
B) Any assessment or surcharge paid or incurred by a taxpayer under
Chapter 9 (commencing with
Section 10090) of Part of Division of the Insurance Code. (
b) For purposes of this section, all of the following shall apply: (1) “Base year premium” is the amount of premium paid or incurred by a taxpayer for a fire insurance policy under
Chapter 2 (commencing with
Section 2030) of Part of Division of the Insurance Code in the calendar year. (2) (A) “Policy of residential property insurance” means a policy insuring individually owned residential structures of not more than four dwelling units, individually owned condominium units, or individually owned mobilehomes, and their contents, located in this state and used exclusively for residential purposes. (B) “Policy of residential property insurance” shall not include insurance for real property, or the contents thereof, used for any commercial or industrial purpose. (3) “Premium paid or incurred” shall not include interest charges or other fees paid or incurred through a premium finance plan or other plan for extension of credit. (4) “Qualified residential property” means an individually owned residential structures of not more than four dwelling units, individually owned condominium units, or individually owned mobilehomes, and their contents, located in this state and used exclusively as the taxpayer’s primary residence that was purchased prior to December 31, 2023. (5) "?>“Qualified taxpayer” means an individual that satisfies either of the following: (i)</xhtml:p>"?> (
A) In the case of spouses filing a joint return, heads of household, or a surviving spouse, adjusted gross income does not exceed three hundred thousand dollars ($300,000). (ii)</xhtml:p>"?> (
B) In the case of a single individual or a spouse filing a separate return, adjusted gross income does not exceed one hundred fifty thousand dollars ($150,000). (B)<xhtml:span class="EnSpace"/>“Qualified taxpayer” shall not include an individual with insured residential real property with an aggregate value greater than three million three hundred thousand dollars ($3,300,000).</xhtml:p>"?> (
c) The credit allowed by this
section shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed under this part with respect to amounts taken into account in calculating the credit allowed by this section. (d) "?>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 of Division of Title of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section. (2)<xhtml:span class="EnSpace"/>The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed. </xhtml:p>"?> (e)
(1) For purposes of complying with
Section 41, the Legislature finds and declares as follows: (
A) The specific goal of the credit allowed by this
section is to assist California taxpayers in affording the massive price increases for the cost of residential property insurance. (
B) The performance indicators for the Legislature to use in determining whether the credit achieves the goal described in subparagraph (
A) are the number of taxpayers claiming the credit and whether the average year-over-year increase on insurance premiums is in line with increases in the California Consumer Price Index. (2) (
A) No later than July 1, 2028, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with
Section of the Government Code, detailing the number of taxpayers claiming the credit in the most recent taxable year, and the total dollar value of credits allowed. (
B) The disclosure requirements of this paragraph shall be treated as an exception to
Section 19542. (
f) This
section shall remain operative only until December 1, 2031, and as of that date is repealed.
SEC. 2. This act provides for a tax levy within the meaning of