AB 2533: Personal income taxes: unemployment insurance: fitness benefit.
This bill allows a deduction from gross income for qualified fitness benefits provided by an employer to an employee. A qualified fitness benefit is defined as a uniform stipend amount for fees or dues for membership in a fitness center, health club, or gym. The deduction is limited to $600 per year. This bill also excludes qualified fitness benefits from the definition of wages for unemployment insurance purposes. The bill requires additional information for new tax expenditures and takes effect immediately as a tax levy.
| Apr. 27, 2026 | In committee: Set, second hearing. Held under submission. |
| Apr. 06, 2026 | In committee: Set, first hearing. Referred to REV. & TAX. suspense file. |
| Mar. 26, 2026 | Re-referred to Com. on REV. & TAX. |
| Mar. 25, 2026 | From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended. |
| Mar. 09, 2026 | Referred to Com. on REV. & TAX. |
| Amended IN Assembly March 25, 2026 |
| Introduced by Assembly Member Tangipa |
February 20, 2026 |
LEGISLATIVE COUNSEL'S DIGEST
The people of the State of California do enact as follows:
SECTION 1.
The Legislature finds and declares all of the following:(a)For taxable years beginning on or after January 1, 2026, gross income does not include any “qualified fitness benefit” provided by an employer to an employee.
(b)For purposes of this section, “qualified fitness benefit” means any of the following:
(1)Fees or dues for membership in a fitness center, health club, or gym.
(2)Expenses for participation in fitness or physical activity programs, including yoga, pilates, or group exercise classes.
(3)Subsidies or reimbursements for the purchase of wearable fitness tracking devices, provided such devices are used as part of a formal employer-sponsored wellness program.
(c)The exclusion provided by this section shall not apply to either of the following:
(1)Memberships in any club where the primary purpose is social, athletic, or sporting, such as a country club or golf club.
(2)Expenses for travel, meals, or lodging associated with fitness activities.
(d)The exclusion under this section shall apply regardless of whether the benefit is provided through a direct payment to a third party or as a reimbursement to the employee upon proof of payment.
(e) For purposes of complying with Section 41 as it relates to the tax exclusion provided by this section, the Legislature finds and declares the following:
(1)The specific goal, purpose, and objective of the tax exclusion is to assist California residents in affording the cost of a “qualified fitness benefit” which can increase an employee’s tax liability if provided through an employer-sponsored wellness program. Workplace wellness programs have proven effective in increasing employee productivity, reducing absenteeism, and reducing chronic disease and rising health care costs in the state.
(2)The performance indicators for the Legislature to use in determining whether the exclusion achieves the stated objective shall be the number of California taxpayers that receive the exclusion pursuant to this section.
(3)(A)Notwithstanding Section 10231.5 of the Government Code, no later than June 30, 2029, and each June 30 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers that claimed the tax exclusion pursuant to this section for the most recent taxable year.
(B)The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
SEC. 2.
Section 17072 of the Revenue and Taxation Code is amended to read:17072.
(a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.SEC. 3.
Section 17206 is added to the Revenue and Taxation Code, to read:17206.
(a) For taxable years beginning on or after January 1, 2026, there shall be allowed as a deduction in determining adjusted gross income for a “qualified fitness benefit” provided by an employer to an employee.SEC. 4.
Section 938.6 is added to the Unemployment Insurance Code, to read:938.6.
“Wages” does not include any qualified fitness benefit provided by an employer to an employee, up to six hundred dollars ($600) per year, provided the qualified fitness benefit meets the requirements of Section 17206 of the Revenue and Taxation Code.SEC. 3.SEC. 5.