2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 2 - Imposition of Tax › Section 17053.75.

17053.75. (a) For taxable years beginning on or after January 1, 2024, and except as provided in subdivision (b), there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, in an amount equal to the greater of the following:
(1) Dues paid in that taxable year by the qualified taxpayer multiplied by the workers’ tax credit adjustment factor.
(2) The amount equal to dues paid in that taxable year by the qualified taxpayer, not to exceed an amount set pursuant to subdivision (b) of up to one hundred dollars ($100), recomputed annually beginning January 1, 2025, in the same manner as the recomputation of income tax brackets under subdivision (h) of Section 17041.
(b) (1) Unless otherwise specified in the annual Budget Act, or a bill providing for appropriations related to the annual Budget Act, enacted after May 1, 2024, the workers’ tax credit adjustment factor shall be 0 percent for that year, and the dollar amount allowed pursuant to paragraph (2) of subdivision (a) shall be zero dollars ($0) for that taxable year.
(2) It is the intent of the Legislature that the workers’ tax credit adjustment factor and the maximum dollar amount allowed pursuant to paragraph (2) of subdivision (a) shall be set in a manner to limit the annual revenue loss resulting from this section to no more than four hundred million dollars ($400,000,000).
(c) For purposes of this section, the following definitions apply:
(1) “Bona fide labor organization” means a labor organization that satisfies all of the following:
(A) Is exempt from income taxes pursuant to Section 23701a.
(B) Actually represents employees in California as to wages, hours, and working conditions.
(C) Its officers have been democratically elected by its membership or otherwise in a manner consistent with federal law.
(D) Is free of domination or interference by any employer and has received no improper assistance or support from any employer.
(2) “Dues” means the amount paid or incurred during the taxable year by a taxpayer for dues or dues equivalents paid to a bona fide labor organization.
(3) “Qualified taxpayer” means an individual who satisfies both of the following:
(A) Is represented for purposes of collective bargaining by, and who pays dues or dues equivalents to, a bona fide labor organization.
(B) Meets any of the following requirements:
(i) Has wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(ii) Is a provider of in-home supportive services pursuant to Article 7 (commencing with Section 12300) of Chapter 3 of Part 3 of Division 9 of the Welfare and Institutions Code, or pursuant to Section 14132.95, 14132.952, or 14132.956 of the Welfare and Institutions Code.
(iii) Is a provider of waiver personal care services pursuant to Section 14132.97 of the Welfare and Institutions Code.
(d) The credit allowed pursuant to subdivision (a) shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed under this part with respect to amounts taken into account in calculating the credit allowed by this section.
(e) If the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall, upon appropriation by the Legislature, be paid from the Tax Relief and Refund Account and refunded to the qualified taxpayer.
(f) (1) For purposes of complying with Section 41, the Legislature finds and declares the following:
(A) The purpose of the credit allowed under this section is to help individuals with the cost of being a member of a union.
(B) The performance indicators for the Legislature to use when measuring whether the tax expenditure meets the goals, purposes, and objectives shall be the total number of returns claiming the credit and the aggregate dollar amount of credits claimed.
(2) (A) The Franchise Tax Board shall provide a report to the Legislature in compliance with Section 9795 of the Government Code, beginning in the 2026 calendar year and then on an annual basis each year thereafter, while the credit is in effect, on the total number of returns claiming the credit and the aggregate dollar amount of credits claimed for the most recent taxable year for which information is available.
(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
(Added by Stats. 2022, Ch. 737, Sec. 3. (AB 158) Effective September 29, 2022.)