AB 1589: Personal income taxes: deduction: California qualified tuition program.

The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income of distributions to a beneficiary of, or and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, distributions or earnings under that program, as specified. if specified conditions are met.

This bill, for taxable years beginning on or after January 1, 2023, and before January 1, 2028, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act. Act, not to exceed $5,000 per beneficiary per taxable year. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of the deduction allowed that reduced the qualified taxpayers gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.

This bill would take effect immediately as a tax levy.