AB 1249: State Income Tax Exemption

Summary: AB 1249 clarifies California’s tax code to exclude all types of claimants from paying state taxes on compensation for damages received out of PG&E’s “Fire Victims Trust”.  This helps ensure fire victims receive just compensation for the economic and non-economic damages caused by the fires.

• 9/29/22 Signed into law by the Governor.

What Now?: Updates from the Franchise Tax Board

• Filing 2022 Taxes: 
  • The FTB tax filing forms have been edited to allow for the income tax exclusion of any Fire Victims Trust settlement payments.
  • Schedule CA (540) reflects these changes. Instructions can be found on pages 4, 45, and 52 of the updated 540 Booklet.
  • The 2022, 540, Personal Income Tax Booklet is only available by request from the FTB. Click here to request this Booklet.
• Filing Amended Returns for 2020 or 2021:
  • AB 1249 allows for the retroactive exclusion of these settlements from state income tax. Anyone who received settlement payments in 2020 or 2021 and included them as income in prior tax years will need to file an amended tax return for each year that applies.
  • Information on how to file an amended return can be found on the FTB website under amended returns.
  • The FTB has revised the 2021 Publication 1001, the Supplemental Guidelines to California Adjustments, to include this information and are in the process of revising prior years Publication 1001.
  • The statute of limitation for an individual taxpayer is generally 4 years from the original due date of the return. For example, a taxpayer who received and included a settlement payment in their 2020 tax return has until April 15, 2025 to file an amended return. Additional information can be found on the FTB website under the Statutes of Limitations and refunds.

AB 2283: CPUC Analyze PG&E’s Stock Drop

Summary: AB 2283 would require the California Public Utilities Commission to undertake a comprehensive review of actions taken by the Pacific Gas and Electric Company (PG&E) that materially and adversely affected the value of its stocks provided as a part of its settlement agreement with victims of wildfires between 2015 and 2018 that is a part of PG&E’s plan of reorganization approved by the United States Bankruptcy Court (Court) on June 20, 2020.

• 9/29/22 Vetoed by Governor Newsom. Click here to read his veto message.

 AB 1078: Solar Panel Exemption for Wildfire Victims

Summary: AB 1078 would exempt homes that must be rebuilt due to destruction in a Governor-declared state of emergency from any requirement for solar panels that was not in place at the time of original construction. It would give Camp Fire victims additional time to rebuild without being subject the solar panel requirement while also extending relief to victims of some of the largest fires in state history including the August Complex, SCU Lightning Complex, LNU Lightning Complex as well as the Glass, Zogg, and Creek fires.

• 9/22/22 Vetoed by Governor Newsom. Click here to read his veto message.