The Personal Income Tax Law, in conformity or modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for the medical and dental expenses paid during the taxable year, not compensated for by insurance or otherwise, for the medical or dental care of the taxpayer, spouse, or a dependent, to the extent that such expenses exceed 7.5% of federal adjusted gross income.

This bill would, for taxable years beginning on or after January 1, 2026, instead allow that deduction to the extent that those medical and dental expenses exceed 4% of federal adjusted gross income.

Existing law requires any bill expanding an existing tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.

The bill would provide findings and declarations relating to the goals of the expansion of the deduction for medical and dental expenses.

This bill would take effect immediately as a tax levy.