Bill > AB1282

This bill introduces a new tax deduction for out-of-pocket medical expenses in California, effective for taxable years from January 1, 2025, to January 1, 2030. Specifically, taxpayers can deduct up to $5,000 annually for medical costs not covered by insurance or reimbursed by other means. The bill requires the Franchise Tax Board to submit annual reports to the Legislature detailing the number of taxpayers claiming the deduction and the average dollar value of deductions. The goal of this tax expenditure is to provide California taxpayers some financial relief from rising healthcare costs. The legislation includes performance indicators to evaluate the effectiveness of the deduction, such as tracking the number of taxpayers who utilize it and the total amount of deductions claimed. The tax deduction will automatically expire on December 1, 2030, and any other existing deductions for the same medical expenses will be reduced by the amount of this new deduction. The bill is designed to go into immediate effect as a tax levy, meaning it can be implemented right away upon passage.

Budget and Finance

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