Assembly BillFailedRevenue and Taxation
AB 1431: Personal income taxes: credit: medical services: rural areas.
What AB 1431 does, verified February 3, 2026
The bill aims to provide a tax credit to qualified taxpayers in rural areas of California. A qualified taxpayer can receive a credit equal to the income earned from medical services performed in a rural area, not exceeding $5,000 per year. This tax credit will be available for taxable years starting from 2026 and ending in 2031. The bill also requires additional information for new tax expenditures, including specific goals and objectives, performance indicators, and data collection requirements. The bill takes effect immediately as a tax levy.
Bill journey
✓IntroducedComplete
2In CommitteeCurrent
3First Chamber FloorPending
4Second ChamberPending
5GovernorPending
6ChapteredPending
Last action: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. (2026-02-02)Alert me
Author and sponsors
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| Feb. 02, 2026 | From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. |
| Jan. 31, 2026 | Died pursuant to Art. IV, Sec. 10(c) of the Constitution. |
| May. 05, 2025 | In committee: Set, second hearing. Held under submission. |
| Apr. 29, 2025 | Re-referred to Com. on REV. & TAX. |
| Apr. 28, 2025 | From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended. |
Latest bill textAmended version, April 28, 2025 · 1,094 words
| Amended IN Assembly April 28, 2025 |
CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION
Assembly Bill
No. 1431
| Introduced by Assembly Member Tangipa |
February 21, 2025 |
An act to add and repeal Section 17058.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1431, as amended, Tangipa. Personal income taxes: credit: medical services: rural areas.
The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2025, 2026, and before January 1, 2032, 2031, would allow a credit against the taxes imposed by that law to a qualified taxpayer in an amount equal to the qualified income earned by the qualified taxpayer for medical services services, as defined, performed in a rural area in the state, not to exceed $5,000 per taxable year, as specified.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Section 17058.5 is added to the Revenue and Taxation Code, to read:17058.5.
(a) For each taxable year beginning on or after January 1,(b) For purposes of this section, the following definitions apply:
(1) (A) “Medical services” means the diagnosis, treatment, and prevention of illness, injury, or other physical or mental conditions performed by a qualified taxpayer who is physically present while providing those services. “Medical services” includes, but is not limited to, doctor visits, hospital care, surgeries, mental health therapy, and rehabilitative treatments.
(B) “Medical services” does not include either of the following:
(i) Elective cosmetic procedures.
(ii) Telehealth services.
(1)
(2)
“Qualified income” means(2)
(3)
“Qualified taxpayer” means an individual licensed in the state as any of the following:(A) A dental hygienist licensed pursuant to Article 9 (commencing with Section 1900) of Chapter 4 of Division 2 of the Business and Professions Code.
(B) A certified nurse-midwife licensed pursuant to Article 2.5 (commencing with Section 2746) of Chapter 6 of Division 2 of the Business and Professions Code.
(C) A chiropractor licensed pursuant to Chapter 2 (commencing with Section 1000) of Division 2 of the Business and Professions Code.
(D) A dentist, including a dentist that performs oral and maxillofacial surgery, licensed pursuant to Chapter 4 (commencing with Section 1600) of Division 2 of the Business and Professions Code.
(E) A doctor of podiatric medicine licensed pursuant to Article 22 (commencing with Section 2460) of Chapter 5 of Division 2 of the Business and Professions Code.
(F) An optometrist licensed pursuant to Chapter 7 (commencing with Section 3000) of Division 2 of the Business and Professions Code.
(G) An osteopathic physician and surgeon licensed pursuant to Article 4.5 (commencing with Section 2099.5) of Chapter 5 of Division 2 of the Business and Professions Code.
(H) A physical therapist licensed pursuant to Chapter 5.7 (commencing with Section 2600) of Division 2 of the Business and Professions Code.
(I) A physician and surgeon licensed pursuant to Chapter 5 (commencing with Section 2000) of Division 2 of the Business and Professions Code.
(J) A physician assistant licensed pursuant to Chapter 7.7 (commencing with Section 3500) of Division 2 of the Business and Professions Code.
(K) A psychologist licensed pursuant to Chapter 6.6 (commencing with Section 2900) of Division 2 of the Business and Professions Code.
(L) A registered nurse or nurse practitioner licensed pursuant to Chapter 6 (commencing with Section 2700) of Division 2 of the Business and Professions Code.
(M) A speech-language pathologist or audiologist licensed pursuant to Chapter 5.3 (commencing with Section 2530) of Division 2 of the Business and Professions Code.
(3)
(4)
“Rural area” has the same meaning as in Section 50199.21 of the Health and Safety Code.(c) Any deduction or credit otherwise allowed under this part for any amount of qualified income upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(d) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and for the seven succeeding years if necessary, until the credit has been exhausted.
(e) A qualified taxpayer shall report to the Franchise Tax Board, at the board’s Franchise Tax Board’s request and in the form and manner specified by the board, Franchise Tax Board, any information regarding the credit allowed under this section deemed necessary by the Franchise Tax Board for administration of this section.
(f) (1) For the purposes of complying with Section 41, the Legislature finds and declares that the both of the following:
(A) The
purpose and specific goal of this credit is to encourage urban medical providers to offer care in underserved rural areas, which would improve access to essential health care services.(B) Detailed performance indicators for the Legislature to use in determining whether the credits meet that goal are as follows:
(i) The total dollar amount of tax credit allowed pursuant to this section.
(ii) The number of taxpayers that were allowed a tax credit pursuant to this section.
(2) (A) On or before January 1, 2030, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the total dollar amount of tax credits allowed pursuant to this section and the number of taxpayers allowed a credit pursuant to this section.
(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
(g) This section shall remain in effect only until December 1, 2032, 2031, and as of that date is repealed.This section shall remain in effect only until December 1, 2032, and as of that date is repealed.
Text of AB 1431 as amended, from the official record. Connect Plus keeps every version and highlights what changed.Compare versions