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AB 1431

Personal income taxes: credit: medical services: rural areas.

2025-2026 Regular Session Introduced by David Tangipa

Creates a temporary California personal income tax credit up to $5,000/year for licensed medical professionals delivering in-person care in rural areas to boost access.

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
#personalincometaxes #credit #medicalservices #ruralareas
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Bill Summary · AB 1431

AB 1431 (Tangipa) — Summary

Status: In committee (Assembly Revenue & Taxation). Set for second hearing; held under submission (as of 05/05/2025).
Introduced: 02/21/2025. Effective: immediately as a tax levy upon enactment.

Purpose / Intent

AB 1431 creates a temporary personal income tax credit intended to encourage licensed medical providers to deliver in‑person care in underserved rural areas of California by reducing their state income tax liability for compensation earned for those services.

Key provisions

  • New tax credit (Revenue & Taxation Code §17058.5) for taxable years beginning on or after January 1, 2025/2026 and before January 1, 2031/2032 (the bill text contains duplicate/ambiguous date references; see “Notes on dates” below).
  • Amount: credit equals a qualified taxpayer’s “qualified income” (compensation for eligible medical services performed in a rural area), capped at $5,000 per taxable year.
  • Qualified taxpayers: individuals licensed in California in specified health professions, including (but not limited to) physicians and surgeons, osteopathic physicians, physician assistants, nurse practitioners/registered nurses, dentists, dental hygienists, chiropractors, optometrists, podiatrists, certified nurse‑midwives, physical therapists, psychologists, speech‑language pathologists, and audiologists (full list in the bill).
  • Qualified income: monetary compensation paid by an employer to the qualified taxpayer for medical services performed in a rural area and authorized under the practitioner’s license.
  • “Medical services” must be delivered while the provider is physically present; explicitly excludes elective cosmetic procedures and telehealth services.
  • Interaction with other tax benefits: any deduction or credit otherwise allowed for the same qualified income is reduced by the amount of this credit.
  • Excess credit: refundable? No — but unused credit may be carried forward to reduce net tax for the following year and for the seven succeeding years.
  • Administration/reporting: Franchise Tax Board (FTB) may require applicants to provide information for administration. FTB must report to the Legislature by January 1, 2030 (per Government Code §9795) on (a) total dollar amount of credits allowed and (b) number of taxpayers receiving the credit. That disclosure is treated as an exception to §19542.
  • Sunset/repeal: the section is set to be repealed on December 1, 2031/2032 (bill text contains duplicate references).

Who is affected

  • Primary beneficiaries: eligible, licensed medical professionals who receive employer‑paid compensation for qualifying in‑person services performed in designated rural areas.
  • State fiscal impact: the credit reduces state personal income tax receipts; the bill was referred to the fiscal committee (no appropriation). Exact fiscal cost would depend on take‑up and total qualifying compensation.

Timeline & Procedural notes

  • Introduced Feb 21, 2025; referred to Assembly Revenue & Taxation. Amended and re‑referred; placed on suspense file; committee set for hearings (most recent: held under submission 05/05/2025).
  • The bill takes effect immediately as a tax levy if enacted.

Notes on date inconsistencies

The bill text contains duplicate/overlapping year ranges (references to both 2025 and 2026 as start dates, and both 2031 and 2032 as end/sunset dates). Those inconsistencies appear to be drafting artifacts from amendment and should be resolved in later edits; the summary above flags both sets of dates and highlights the ambiguity.

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

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