Bill > SB1137

This bill, effective immediately as a tax levy, amends California's Personal Income Tax Law to lower the threshold for deducting medical and dental expenses. Currently, taxpayers can deduct medical and dental expenses that exceed 7.5% of their federal adjusted gross income, which is their income after certain deductions and adjustments. However, for taxable years beginning on or after January 1, 2026, this bill will allow taxpayers to deduct medical and dental expenses that exceed a lower threshold of 4% of their federal adjusted gross income, meaning individuals will be able to deduct a larger portion of their out-of-pocket healthcare costs. The bill also includes legislative findings and declarations outlining the goals of this change, such as helping Californians manage rising healthcare premiums and pay less in state taxes, and establishes performance indicators to measure the impact of this expanded deduction, including tracking the number of taxpayers claiming it and the total dollar amount of deductions taken.

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB1137