AB 782: California Health Insurance Fairness Act: personal income tax: deduction: medical insurance.

The Personal Income Tax Law allows various deductions in computing the income that is subject to the taxes imposed by that law including in modified conformity with federal tax law, a deduction for that portion of medical expenses that is more than 7.5% of adjusted gross income. Self-employed individuals are allowed to deduct health insurance premiums for medical expenses incurred by the taxpayer in lieu of the itemized deduction for medical expenses.

This bill, for taxable years beginning on or after January 1, 2017, would allow a deduction from gross income under the Personal Income Tax Law for the amounts paid or incurred by a taxpayer during the taxable year for medical insurance for medical care, as defined, and for transportation for and essential to that medical care, as provided. The bill would not allow as an itemized deduction, the amount allowed as a deduction from gross income as provided.

This bill would take effect immediately as a tax levy.