SB 798 - College Access Tax Credit

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November 7, 2014

Purpose of Bulletin

To inform staff of the College Access Tax Credit (CATC) available for tax years 2014-2016.

Background

The CATC is a tax credit for any taxpayer who contributes money to the CATC fund.  SB 798, which was signed by the Governor in September, established the credit providing personal and corporate income tax credits under California Revenue and Taxation Code Sections 17053.86 and 23686.

Status

The CATC is available for taxable years 2014-2016.  In order to claim a credit, a taxpayer must make a contribution to the CATC fund administered by the California Educational Facilities Authority (CEFA).

To take a credit, taxpayers must receive a certificate from CEFA documenting the amount of the contribution and the credit amount.     

The total amount of credit that CEFA can allocate for each year is $500 million.  The amount of the credit  for each taxable year is:

2014 – 60% of the contribution
2015 – 55% of the contribution
2016 – 50% of the contribution

Any allocated credit that the taxpayer is unable to use in the current taxable year may be carried over until exhausted for up to six years after the credit is first claimed. 

Taxpayers claiming the CATC credit may not also claim a charitable deduction for the CATC contribution amount on their California tax return.  However, the taxpayer may be able to deduct their CATC contribution as a charitable deduction on their federal return.  Any deduction on their federal return for that contribution must be added back as a state adjustment on the taxpayer's California tax return, as the taxpayer is not allowed a deduction for the same contributions for which they received a credit.

Additional Information

Additional information on CATC is available on the state treasurer’s website at treasurer.ca.gov or our website at ftb.ca.gov and search for CATC.

CEFA began accepting applications for an allocation of the credit on November 3, 2014.

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