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Bill

SB 573

Personal Income Tax Law: exclusions: guaranteed income pilot programs.

2025-2026 Regular Session Introduced by Lola Smallwood-Cuevas

California would exclude guaranteed income pilot program payments from state income tax to increase net benefits for participant households and support poverty reduction experimentation.

From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.
#personalincometaxlaw #exclusions #guaranteedincomepilotprograms
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WeVote Research Nonpartisan
Bill Summary · SB 573

Legislative bill overview

SB 573 would exclude income received from state-authorized guaranteed income pilot programs from California's personal income tax calculations. This creates a tax exemption specifically for participants in government-sponsored guaranteed income initiatives, allowing them to receive pilot program funds without triggering additional state income tax liability.

Why is this important

Guaranteed income pilots are experimental anti-poverty programs that provide regular cash payments to participants. By exempting this income from taxation, the bill effectively increases the net benefit participants receive, potentially making pilot programs more effective at reducing financial hardship. This also signals state policy support for testing guaranteed income as a poverty reduction strategy.

Potential points of contention

  • Revenue impact: The bill reduces state tax revenue by exempting income that would normally be taxable, creating fiscal costs that must be absorbed elsewhere or offset by other measures.
  • Fairness questions: Some argue exempting guaranteed income but not other forms of assistance or income creates inconsistent tax policy and may benefit some low-income groups while disadvantaging others.
  • Program scope uncertainty: The bill's effectiveness depends on how many pilot programs the state authorizes and how many residents participate, making the full financial impact difficult to predict.

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

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