Bill > SB657

This bill amends California's Personal Income Tax Law to align with recent federal tax changes regarding qualified tuition programs (529 plans), specifically the Consolidated Appropriations Act of 2023. The bill will exempt from gross income certain distributions from long-term qualified tuition programs (specifically the Golden State Scholarshare Trust) that are directly transferred to a Roth IRA during tax years beginning on or after January 1, 2025, and before January 1, 2030. This change allows individuals to roll over funds from a 529 college savings plan to a Roth IRA without incurring income tax, providing more flexibility for those with unused education savings. The bill also modifies reporting requirements and removes previous language about detailed performance indicators, replacing it with a statement that there is no available data to collect or report regarding these tax exclusions. The legislation aims to conform state tax law to recent federal tax changes, providing tax relief and simplifying tax return preparation for taxpayers who choose to transfer funds in this manner. The bill takes effect immediately as a tax levy, meaning it can be implemented right away.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB657