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Bill

AB 1282

Personal Income Tax Law: credits: medical expenses.

2025-2026 Regular Session Introduced by Carl DeMaio and 2 co-sponsors

AB 1282 would establish a California state income tax credit for residents' out-of-pocket medical expenses to reduce healthcare cost burden.

In committee: Set, second hearing. Held under submission.
#personalincometaxlaw #credits #medicalexpenses
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WeVote Research Nonpartisan
Bill Summary · AB 1282

Legislative bill overview

AB 1282 would create a state income tax credit for California residents' out-of-pocket medical expenses. The bill appears designed to provide tax relief by allowing taxpayers to deduct qualifying healthcare costs from their state income taxes, similar to federal tax provisions. Specific details on eligibility thresholds, qualifying expenses, and credit amounts are not provided in the action history.

Why is this important

Healthcare costs represent a significant financial burden for many California households, particularly those with chronic conditions or major medical events. A state-level tax credit could provide meaningful relief to middle and lower-income families who face high out-of-pocket expenses not covered by insurance. However, the fiscal impact on California's budget—already facing revenue challenges—would be substantial and warrant careful analysis.

Potential points of contention

  • Fiscal cost: California's state budget constraints mean any new tax credit must be weighed against other spending priorities; the revenue loss could be significant depending on credit generosity
  • Design equity: Questions remain about which medical expenses qualify, whether the credit has income limits, and whether it adequately helps lower-income Californians versus higher earners
  • Federal coordination: Unclear how this interacts with federal medical expense deductions, potentially creating double-benefits for some taxpayers while others receive minimal benefit

Compiled from official sources — confirm details with the bill’s official record.

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