Better For Families Tax Refund - - CA Welfare And Institutions

Section § 8160

This section simply states that the chapter is officially named the “Better for Families Act.”

This chapter is known and may be cited as the “Better for Families Act.”

Better for Families Act official title chapter name cited as families designation title of chapter act name reference name chapter citation

(Added by Stats. 2022, Ch. 51, Sec. 6. (AB 192) Effective June 30, 2022. Repealed as of January 1, 2027, pursuant to Section 8165.)

Section § 8161

This law requires the Franchise Tax Board to make a one-time payment to qualified recipients based on their income and filing status. Married couples filing jointly, heads of household, and surviving spouses can receive different payment amounts, which also vary if they claimed dependents. Individual income levels determine if someone can receive $350 to $700, plus additional amounts if they claimed dependents. To qualify, individuals must have filed a California tax return by specified dates, been a state resident for a specified period, and not be claimed as dependents by others.

Single filers without dependents, deceased individuals, or those incarcerated at the time of payment do not qualify. Joint filers are treated as one recipient. The payments aren’t tax refunds and don't affect various benefits for 12 months. Payments should be made by September 30, 2023, but can be reissued afterward using debit cards or stale warrants. The payments are treated like federal earned income refunds for benefit eligibility, except where federal law conflicts.

(a) The Franchise Tax Board shall, as soon as possible, make a one-time payment in the applicable amount to each qualified recipient. A qualified recipient shall not receive more than one payment of the applicable amount. The payments may be made in the form and manner determined by the Franchise Tax Board.

(b) For purposes of this section, the following definitions shall apply:

(1) “Applicable amount” means any of the following:

(A) In the case of spouses filing a joint return pursuant to Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code, that reported a California adjusted gross income, on the return described in clause (i) of subparagraph (A) of paragraph (4), of:

(i) One hundred fifty thousand dollars ($150,000) or less, the applicable amount shall be seven hundred dollars ($700) plus an additional three hundred fifty dollars ($350) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(ii) Two hundred fifty thousand dollars ($250,000) or less, and more than one hundred fifty thousand dollars ($150,000), the applicable amount shall be five hundred dollars ($500) plus an additional two hundred fifty dollars ($250) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(iii) Five hundred thousand dollars ($500,000) or less, and more than two hundred fifty thousand dollars ($250,000), the applicable amount shall be four hundred dollars ($400) plus an additional two hundred dollars ($200) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(B) In the case of an individual filing a head of household return pursuant to Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code, or an individual filing a surviving spouse return pursuant to Part 10.2 (commencing with Section 18401) of Division 2 of the Revenue and Taxation Code that reported a California adjusted gross income, on the return described in clause (i) of subparagraph (A) of paragraph (4), of:

(i) One hundred fifty thousand dollars ($150,000) or less, the applicable amount shall be three hundred fifty dollars ($350) plus an additional three hundred fifty dollars ($350) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(ii) Two hundred fifty thousand dollars ($250,000) or less, and more than one hundred fifty thousand dollars ($150,000), the applicable amount shall be two hundred fifty dollars ($250) plus an additional two hundred fifty dollars ($250) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(iii) Five hundred thousand dollars ($500,000) or less, and more than two hundred fifty thousand dollars ($250,000), the applicable amount shall be two hundred dollars ($200) plus an additional two hundred dollars ($200) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(C) In the case of any other individual that reported a California adjusted gross income, on the return described in clause (i) of subparagraph (A) of paragraph (4), of:

(i) Seventy-five thousand dollars ($75,000) or less, the applicable amount shall be three hundred fifty dollars ($350) plus an additional three hundred fifty dollars ($350) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(ii) One hundred twenty-five thousand dollars ($125,000) or less and more than seventy-five thousand dollars ($75,000), the applicable amount shall be two hundred fifty dollars ($250) plus an additional two hundred fifty dollars ($250) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(iii) Two hundred fifty thousand dollars ($250,000) or less and more than one hundred twenty-five thousand dollars ($125,000), the applicable amount shall be two hundred dollars ($200) plus an additional two hundred dollars ($200) if the qualified recipient claimed a credit for one or more dependents under paragraph (1) of subdivision (d) of Section 17054 of the Revenue and Taxation Code on the return described in clause (i) of subparagraph (A) of paragraph (4).

(2) “Individual” shall have the same meaning as that term is defined in Section 17005 of the Revenue and Taxation Code.

(3) “Resident” shall have the same meaning as that term is defined in Section 17014 of the Revenue and Taxation Code.

(4)

(A) “Qualified recipient” means an individual that satisfies all of the following:

(i) Filed a California individual income tax return on or before October 15, 2021, for the taxable year beginning on or after January 1, 2020, and before January 1, 2021.

(ii) Is a resident of the state on the date payment is issued pursuant to subdivision (a).

(iii) Was a resident of the state for six months or more of the taxable year beginning on or after January 1, 2020, and before January 1, 2021.

(iv) Cannot be claimed as a dependent, as defined in Section 17056 of the Revenue and Taxation Code, by another taxpayer.

(B) In the case of an individual who included either their federal individual taxpayer identification number or, if married, the federal individual taxpayer identification number of their spouse, on their California individual income tax return for the taxable year beginning on or after January 1, 2020, and before January 1, 2021, and who meets all of the other requirements of a qualified recipient, if the individual or their spouse applied for, but did not receive, a federal individual taxpayer identification number on or before October 15, 2021, the individual is a qualified recipient for purposes of this section if the tax return described in this subparagraph was filed on or before February 15, 2022.

(C) Notwithstanding subparagraphs (A) and (B), “qualified recipient” shall not include an individual that satisfies all of the following:

(i) Is an individual without a dependent, as defined in Section 17056 of the Revenue and Taxation Code.

(ii) Files or filed their California individual income tax return using the single filing status for the taxable year described in clause (i) of subparagraph (A).

(iii) Is either of the following:

(I) Is deceased on the date the payment would otherwise be issued as authorized under subdivision (a).

(II) Is incarcerated, other than incarceration pending the disposition of charges, in a jail, prison, or similar penal institution or correctional facility on the date the payment would otherwise be issued as authorized under subdivision (a).

(c) In the case of a qualified recipient who files a joint return with their spouse pursuant to Part 10.2 (commencing with Section 18401) of the Revenue and Taxation Code for the taxable year described in clause (i) of subparagraph (A) of paragraph (4) of subdivision (b), the qualified recipient and their spouse shall be considered one qualified recipient for purposes of this section, and shall receive only one payment of the applicable amount.

(d)

(1) The Franchise Tax Board shall issue the payments authorized by this section no later than September 30, 2023.

(2) Notwithstanding paragraph (1), the Franchise Tax Board may reissue stale, dated, or replacement warrants for the payments pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of Section 905.2 of the Government Code after September 30, 2023, in the form and manner prescribed by the Franchise Tax Board.

(3) Notwithstanding paragraph (1), the Franchise Tax Board, through a third-party vendor, may reissue replacement debit cards after September 30, 2023, in the form and manner prescribed by the Franchise Tax Board.

(e) The payment authorized by this section shall not be a refund of an overpayment of income taxes under Chapter 6 (commencing with Section 19301) of Part 10.2 of Division 2 of the Revenue and Taxation Code of any liability imposed under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.

(f) Notwithstanding any other law, the payment authorized pursuant to this section shall be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits under Division 9 (commencing with Section 10000), excluding benefits under Chapter 7 (commencing with Section 14000) of Part 3 of Division 9, or amounts of those benefits.

(g) Notwithstanding any other law, the payment authorized pursuant to this section shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual, or any other individual, for benefits or assistance or the amount or extent of benefits or assistance under any state or local program not covered in subdivision (e). With respect to a state or local program, this subdivision shall only be implemented to the extent that it does not conflict with federal law relating to that program, and that any required federal approval or waiver is first obtained for that program.

one-time payment Franchise Tax Board qualified recipient filing status California adjusted gross income claim dependents joint tax return head of household surviving spouse income thresholds payment amount resident requirements dependent credit eligibility criteria refund exclusion replacement debit cards

(Amended by Stats. 2023, Ch. 55, Sec. 15. (SB 131) Effective July 10, 2023. Repealed as of January 1, 2027, pursuant to Section 8165.)

Section § 8162

This law creates the Better for Families Tax Refund Fund in California's State Treasury. The Franchise Tax Board can use this fund to make necessary payments as described in a related law, and they have continuous access to the funds without worrying about fiscal year limitations.

The State Controller is responsible for moving money from the General Fund to this new fund, but only up to the necessary amount. If any payments are returned, they go back to this fund.

Any unused money left in the Better for Families Tax Refund Fund as of June 1, 2024, will be moved to the General Fund.

(a) There is hereby created in the State Treasury the Better for Families Tax Refund Fund. Notwithstanding Section 13340 of the Government Code, an amount necessary for the Franchise Tax Board to make the payments required under this chapter is hereby continuously appropriated, without regard to fiscal year, from the Better for Families Tax Refund Fund to the Franchise Tax Board for the purpose of making the payments authorized by Section 8161.

(b) The Controller shall transfer from the General Fund to the Better for Families Tax Refund Fund an amount not in excess of the amount appropriated under subdivision (a).

(d) Any unused moneys remaining in the Better for Families Tax Refund Fund for the purposes of this act shall be transferred to the General Fund by June 1, 2024.

Better for Families Tax Refund Fund Franchise Tax Board payments continuous appropriation State Treasury General Fund transfer unused funds transfer Controller responsibilities redeposited payments fiscal year limitations

(Added by Stats. 2022, Ch. 51, Sec. 6. (AB 192) Effective June 30, 2022. Repealed as of January 1, 2027, pursuant to Section 8165.)

Section § 8163

This law allows the state to hire a third-party company to help distribute payments efficiently and prevent fraud. These agreements must include terms that are beneficial to the state, and payments must have an expiration date by April 30, 2026. Any leftover or unclaimed funds must be returned to the state's Franchise Tax Board by May 31, 2026, to be put back into the General Fund.

Notwithstanding any other law, the state may contract with a third-party vendor for services relating to the distribution of payments made pursuant to this chapter in the form and manner best determined to expedite payment and mitigate fraud. A contract for services entered into pursuant to this section may include terms and conditions that are in the state’s best interest, but shall include an expiration date on each form of payment issued of no later than April 30, 2026, and a requirement that any unexpended or unclaimed balance of the payments issued shall, upon expiration, be returned to the Franchise Tax Board which will deposit the moneys in the General Fund, and all unused balances returned, no later than May 31, 2026.

third-party vendor services distribution payment distribution fraud mitigation contract terms expiration date unclaimed balance Franchise Tax Board General Fund unused funds return payment expiration efficient payment payment contract unexpended balance

(Amended by Stats. 2024, Ch. 34, Sec. 43. (SB 167) Effective June 27, 2024. Repealed as of January 1, 2027, pursuant to Section 8165.)

Section § 8164

This law section states that payments identified as 'Better for Families Tax Refunds' are generally protected from being taken through garnishment orders. However, there are exceptions for garnishment related to child support, spousal support, family support, or criminal restitution to victims. Financial institutions receiving such payments directly from the state must recognize and exempt these funds from garnishment. They must review accounts to identify exempt deposits using a specific timeframe known as the 'lookback period'. If financial institutions make a genuine effort to follow these rules, they won’t be liable for any violations concerning these payments. Terms like 'account review' and 'lookback period' are defined to clarify the process.

(a)

(1) A Better for Families Tax Refund payment made pursuant to Section 8161 shall be automatically exempt from a garnishment order.

(2) This subdivision does not apply to a garnishment order in connection with an action for, or a judgment awarding, child support, spousal support, family support, or a criminal restitution payable to victims.

(b) Notwithstanding any other law, a financial institution receiving directly from the state the payments described in subdivision (a) shall exempt those payments from any garnishment order if the payment is marked by the state as a “Better for Families Tax Refund payment” or includes some other industry-standard unique identifier that is reasonably sufficient to allow the financial institution to identify the funds as a Better for Families Tax Refund payment.

(c)

(1) In exempting a Better for Families Tax Refund payment from a garnishment order, a financial institution shall identify an exempt deposit using a lookback period during an account review.

(2) The financial institution shall perform a one-time account review consistent with the requirements described in subsection (a) of Section 212.5 of Title 31 of the Code of Federal Regulations.

(d) A financial institution that attempts in good faith to comply with this section shall not be subject to liability or regulatory action under a federal or state law, regulation, court or other order, or regulatory interpretation for actions concerning applicable payments.

(e) As used in this section:

(1) “Account review” means the process of examining deposits in an account to determine if a benefit agency has deposited a benefit payment into the account during the lookback period.

(2) “Garnishment order” means a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, a state or state agency, or a municipality or municipal corporation, including an order to freeze the assets in an account, to effect a garnishment against a debtor.

(3) “Lookback period” means the two-month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier or on the last date of the month two months earlier if the corresponding date does not exist.

Better for Families Tax Refund garnishment exemption financial institution compliance child support garnishment spousal support garnishment criminal restitution account review exempt deposit lookback period unique identifier benefit payment freeze assets good faith compliance federal regulations financial liability protection

(Added by Stats. 2022, Ch. 51, Sec. 6. (AB 192) Effective June 30, 2022. Repealed as of January 1, 2027, pursuant to Section 8165.)

Section § 8165

This law is temporary and will no longer be valid after January 1, 2027.

This chapter shall remain in effect only until January 1, 2027, and as of that date is repealed.

temporary law repeal date expiration sunset clause January 1 2027 law expiration sunset provision temporary legislation law termination expiration date limited duration law law validity legislative expiry automatic repeal short-term law

(Added by Stats. 2022, Ch. 51, Sec. 6. (AB 192) Effective June 30, 2022. Repealed as of January 1, 2027, by its own provisions. Note: Repeal affects Chapter 4.9, commencing with Section 8160.)