AB 509: Personal income taxes: gross income: exclusion: student loan assistance.

The Personal Income Tax Law excludes from the gross income of an employee amounts paid or incurred by an employer for educational assistance to the employee, as specified, up to $5,250 during a calendar year.

This bill would include in the definition of educational assistance a payment made by an employer on or after January 1, 2024, and before January 1, 2034, 2026, paid or incurred by the employer, whether paid to the employee or to a lender, of principal or interest on a qualified education loan, as defined, relating to interest on education loans, incurred by the employee for education of the employee. The bill would also make various technical changes to these provisions and delete obsolete language relating to graduate level educational assistance.

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.

The bill would make specified findings detailing the goals, purposes, and objectives of the above-described exclusion, and the performance indicators for determining whether the exclusion meets those goals, purposes, and objectives.

This bill would take effect immediately as a tax levy.