California SB 1137: Personal income tax: deduction: medical expenses.

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 |Add To My Favorites |Track Bill | Version: 04/08/26 - Amended Senate
 02/18/26 - Introduced

 SB-1137 Personal income tax: deduction: medical expenses.(2025-2026)

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 Date Published: 04/08/2026 09:00 PM

SB1137:v98#DOCUMENTBill Start

 Amended
 IN 
 Senate
 April 08, 2026

 CALIFORNIA LEGISLATURE—
 2025–2026 REGULAR SESSION

 Senate Bill

No. 1137

Introduced by Senator Valladares
(Coauthors: Senators Alvarado-Gil, Choi, and Strickland)
(Coauthors: Assembly Members Alanis, Lackey, Macedo, and Tangipa)

February 18, 2026

 An act to amend Section 17241 of Section 17072 of, and to add and repeal Section 17242 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. 

LEGISLATIVE COUNSEL'S DIGEST

SB 1137, as amended, Valladares.
 Personal income tax: deduction: medical expenses.

The Personal Income Tax Law, in conformity or modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law, including a deduction for the medical and dental expenses paid during the taxable year, not compensated for by insurance or otherwise, for the medical or dental care of the taxpayer, spouse, or a dependent, to the extent that such expenses exceed 7.5% of federal adjusted gross income.

This bill would, for taxable years beginning on or after January 1, 2026, instead allow that deduction to the extent that those medical and dental expenses exceed 4% of federal adjusted gross income. and
 before January 1, 2031, allow a deduction from adjusted gross income for the costs of medical care, as defined, of a qualified taxpayer to the extent the costs exceed 4% of the qualified taxpayer’s federal adjusted gross income. The bill would limit the deduction to $5,000. The bill would define “qualified taxpayer” for this purpose to mean an individual with adjusted gross income that does not exceed 300% of the federal poverty level and who does not take an itemized deduction for costs of medical care pursuant to the above-referenced provisions on their California income tax return.

Existing law requires any bill expanding an existing tax deduction to contain, among other things, specific goals, purposes, and
 objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements. authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. 

The bill would provide findings and declarations relating to the goals of the expansion of the deduction for medical and dental expenses.

This bill also would include additional information required for any bill authorizing a new tax expenditure. 

This bill would take effect immediately as a tax levy.

Digest Key

 Vote:
 MAJORITY 
 Appropriation:
 NO 
 Fiscal Committee:
 YES 
 Local Program:
 NO 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 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.

(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.

(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.

(d) For taxable years beginning on or after January 1, 2026, Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to
 provide that the deduction under Section 17242 shall be allowed in determining adjusted gross income.

SEC. 2.

 Section 17242 is added to the Revenue and Taxation Code, to read:

17242.

 (a) (1) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed a deduction in determining the adjusted gross income of a qualified taxpayer an amount equal to the costs of medical care not compensated for by insurance or otherwise to the extent that such costs exceed 4 percent of the qualified taxpayer’s federal adjusted gross income.

(2) The deduction allowed by paragraph (1) shall not exceed five thousand dollars ($5,000).

(b)