California Educational Facilities Authority

College Access Tax Credit Overview

Senate Bill 798 ("SB 798"), codified under Revenue and Taxation Code sections 17053.86 and 23686, was signed into law by the Governor on September 16, 2014 and became effective immediately as an urgency statute. Senate Bill 81 ('SB 81' or together with SB 798, the 'bills') was signed into law by the Governor on June 24, 2015, amended Revenue and Taxation Code sections 17053.86 and 23686 and added sections 12207, 17053.87, and 23687. The bills authorize a College Access Tax Credit ("tax credit") for taxable years beginning on or after January 1, 2014, and before January 1, 2018, based on a percentage of the taxpayer's contribution to the College Access Tax Credit Fund (the "Fund"). The California Educational Facilities Authority ('CEFA' or the 'Authority') is required to allocate and certify the tax credit.

  • The maximum aggregate amount of tax credits that can be allocated and certified by CEFA each calendar year (2014, 2015, and 2016) is $500 million in addition to the amount of any unallocated and uncertified tax credits in the previous calendar year.
  • The maximum aggregate amount of tax credits that can be allocated and certified by CEFA in 2017 is $500 million.
  • Applications for the tax credit will be processed on a first come, first served basis.

The tax credit is based on the following percentages:

  • 60% of the amount contributed by the taxpayer to the Fund for the 2014 taxable year.
  • 55% of the amount contributed by the taxpayer to the Fund for the 2015 taxable year.
  • 50% of the amount contributed by the taxpayer to the Fund for the 2016 taxable year.
  • 50% of the amount contributed by the taxpayer to the Fund during the 2017 taxable year.

CEFA's responsibilities under SB 798:

  • Allocate and certify tax credits to taxpayers for taxable years 2014, 2015, and 2016.
  • Establish a procedure for taxpayers to contribute to the Fund and obtain a certification for the tax credit.
  • Provide to the Franchise Tax Board a copy of the certifications by March 1.
  • Adopt necessary regulations.

CEFA's additional responsibilities under SB 81:

  • Allocate and certify tax credits to taxpayers for the taxable year 2017.
  • Provide to the Department of Insurance a copy of the certifications by March 1