Personal income tax: credit: durable medical equipment.
SB 785
California Bills
20250SB__078595ENR INTRODUCED 2025-02-21 AMENDED_SENATE 2025-03-25 AMENDED_SENATE 2025-05-06 AMENDED_ASSEMBLY 2025-07-07 PASSED_ASSEMBLY 2025-09-04 PASSED_SENATE 2025-09-08 ENROLLED 2025-09-10 2025 SB ENR Introduced by Senator Caballero LEAD_AUTHOR SENATE Caballero
An act to add and repeal
Section 17052.30 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: credit: durable medical equipment. The Personal Income Tax Law allows various credits against the tax imposed by that law.
This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would allow a credit against those taxes in an amount equal to 50% of unreimbursed costs paid or incurred by a taxpayer for the purchase of durable medical equipment, as defined, for use by a qualifying dependent, as defined, during the taxable year. The bill would limit the credit to $5,000 per taxable year for each qualifying dependent.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals 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 1. The Legislature finds and declares all of the following: (
a) Families with medically complex children often face substantial out-of-pocket costs, even with private insurance or Medi-Cal coverage. (
b) Many essential durable medical equipment items like wheelchairs, ventilators, feeding pumps, or home monitors are either not fully covered, denied by insurance, or require families to pay upfront and appeal later. (
c) According to the Lucile Packard Foundation for Children’s Health, California families of children with special health care needs are more likely to experience financial hardship than families with nondisabled children. (
d) Low- and middle-income families often cannot afford the upfront costs of durable medical equipment, which can lead to delayed care or forced institutionalization. (
e) Access to appropriate durable medical equipment at home often prevents costlier interventions, like emergency room visits or prolonged hospitalizations. (
f) Supporting at-home care aligns with state and federal policy goals around deinstitutionalization and family preservation. (
g) The intent of this bill is to provide much needed relief to taxpaying families who struggle with the out-of-pocket costs associated with medically necessary durable medical equipment.
SEC.
Section 17052.30 is added to the Revenue and Taxation Code , to read: 17052.30. (a)
(1) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed as a credit against the “net tax,” as that term is defined in
Section 17039, an amount equal to percent of the qualified expenditures of a taxpayer during the taxable year.
(2) The credit allowed by this
section shall not exceed five thousand dollars ($5,000) per taxable year for each qualifying dependent. (
b) For purposes of this section, the following
definitions shall apply: (1) “Complex medical conditions” include, but are not limited to, conditions where an individual would be eligible for early and periodic screening, diagnosis, and treatment services, as described in subdivision (
v) of
Section of the Welfare and Institutions Code. (2) “Durable medical equipment” has the same meaning as that term is defined in
Section 1395x(
n) of Title of the United States Code. (3) “Qualified expenditure” shall mean an unreimbursed expense paid or incurred by the taxpayer for the purchase of durable medical equipment prescribed by a licensed health care provider for use by a qualifying dependent. (4) “Qualifying dependent” means a dependent of the taxpayer who has one or more complex medical conditions and is younger than years of age as of the first day of the taxable year. (
c) 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 seven taxable years, if necessary, until the credit has been exhausted. (d)
(1) If any credit allowed by this
section is claimed by the taxpayer, any deduction otherwise allowed under this part for a qualified expenditure shall be reduced by twice the amount of the credit allowed.
(2) The credit allowed pursuant to this
section shall be in lieu of any other credit that the taxpayer may otherwise be allowed under this part with respect to amounts taken into account in calculating the credit allowed by this section. (f)
(1) For purposes of complying with
Section 41, the Legislature finds and declares as follows: (
A) The goal of this credit is to provide financial relief to families with children who have complex medical conditions that face large or consistent out-of-pocket expenses associated with expensive, medically necessary durable medical equipment. (
B) The performance indicators for the Legislature to use in determining whether the credit achieves its stated goal shall be the number of taxpayers allowed a credit pursuant to this section, and the total dollar amount of credits allowed. (2) (
A) The Franchise Tax Board, no later than July 1, 2028, and annually thereafter, shall submit a report to the Legislature, in compliance with
Section of the Government Code, detailing the number of taxpayers allowed a credit pursuant to this
section and the total dollar amount of credits allowed. (
B) The disclosure requirements of this paragraph shall be treated as an exception to
Section 19542. (
g) This
section shall remain operative only until December 1, 2031, and as of that date is repealed.
SEC. 3. This act provides for a tax levy within the meaning of