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CaliforniaAB 22222025-2026 Regular SessionHouseWALLET

Personal Income Tax Law and Corporation Tax Law: credits: local news outlets: business expense deduction: excessive employee remuneration.

Sponsored By: Christopher Ward (Democratic), Buffy Wicks (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 4 benefits, 0 costs, 1 mixed.

Refundable tax credits for local news

For tax years beginning January 1, 2027, through December 31, 2031, qualifying California local news employers get refundable journalist credits. The credit pays $20,000 each for the first five continuously employed full-time journalists and $15,000 each beyond five. Each qualifying new full-time position adds $15,000, and each qualifying part-time journalist adds $7,500. Journalists must live in California and mainly gather, produce, or share state or local community news. Full-time work requires at least 30 hours weekly for more than 26 weeks and annualized compensation of at least $35,000. Part-time work requires 20 to under 30 hours weekly for more than 26 weeks and annualized wages or salary of at least $25,000. Continuous employment requires full-time work for the employer or its combined reporting group in both the prior and current tax years. New positions are measured by the increase in rounded average daily journalist counts, including employees of acquired businesses. Eligible outlets produce original local news through digital news, broadcasting, or print. Employers need California organization or business registration for at least 12 months before the tax year, ownership disclosure, media liability insurance, and public editorial and error-reporting policies. Political committees, other Section 527 entities, and Section 501(c)(4) organizations cannot control the employer. The credit replaces other hiring or employment credits under the same tax part for those journalists. It can reduce tax below the tentative minimum tax amount and follows the credits listed before it in the law's ordering rule. Excess credit first pays other amounts due; the remaining balance is refunded, including for eligible tax-exempt organizations. Refunds come from the continuously funded Tax Relief and Refund Account or Corporation Tax Fund. The Franchise Tax Board must publish claimant counts, total credits, and average credits, and report annually to lawmakers. The credit section is repealed December 1, 2032.

More usable credits for eligible filers

California lets filers claiming the Section 17052.11 credit reduce tax below the tentative minimum tax amount. This exception applies to tax years beginning on or after January 1, 2020. For tax years beginning on or after January 1, 2022, the credit also gets a specified place in the credit order. These rules let eligible filers apply the credit under the stated minimum-tax exception.

More usable credits for post-production businesses

Eligible post-production taxpayers can apply the Section 17053.98.5 credit below the tentative minimum tax amount. The law also gives this credit a specified place in the order for applying credits. Both rules apply to tax years beginning on or after January 1, 2027, and before January 1, 2032. They change how the existing credit is used, not its stated dollar amount.

More usable credits for eligible corporations

California allows credits under Sections 23036.5 and 23698.5 to reduce corporate tax below the tentative minimum tax amount. The Section 23698.5 rule applies to tax years beginning on or after January 1, 2027, and before January 1, 2032. The supplied provisions give no end date for the Section 23036.5 rule. Only taxpayers eligible for the applicable credit receive this treatment.

Business executive-pay limits and contract exceptions

California limits business deductions for a covered employee's pay to $1 million, subject to applicable exceptions. The law applies specified federal amendments governing pay from related companies under common control and how deductions are divided. For the binding-contract exception, California uses March 31, 2019, instead of November 2, 2017. That later contract date provides exception treatment alongside the deduction limit; each business's tax effect depends on its circumstances.

Sponsors & Cosponsors

Sponsors

  • Christopher Ward

    Democratic • House

  • Buffy Wicks

    Democratic • House

Cosponsors

  • Josh Lowenthal

    Democratic • House

  • Tina McKinnor

    Democratic • House

  • Jerry McNerney

    Democratic • Senate

  • Sharon Quirk-Silva

    Democratic • House

Roll Call Votes

All Roll Calls

Yes: 185 • No: 41

House vote • 8/31/2026

AB 2222 Ward Concurrence in Senate Amendments

Yes: 59 • No: 15

Senate vote • 8/30/2026

Assembly 3rd Reading AB2222 Ward et al. By McNerney

Yes: 30 • No: 10

Senate vote • 8/13/2026

Do pass

Yes: 5 • No: 2

Senate vote • 8/3/2026

Placed on suspense file

Yes: 7 • No: 0

Senate vote • 6/24/2026

Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations]

Yes: 4 • No: 0

House vote • 5/27/2026

AB 2222 Ward Assembly Third Reading

Yes: 63 • No: 10

House vote • 5/14/2026

Do pass.

Yes: 12 • No: 2

House vote • 4/20/2026

Do pass as amended and be re-referred to the Committee on [Appropriations]

Yes: 5 • No: 2

Actions Timeline

  1. Chaptered by Secretary of State - Chapter 849, Statutes of 2026.

    9/30/2026Senate

  2. Approved by the Governor.

    9/30/2026legislature

  3. Enrolled and presented to the Governor at 3 p.m.

    9/15/2026legislature

  4. Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 59. Noes 15. Page 6983.).

    8/31/2026House

  5. In Assembly. Concurrence in Senate amendments pending.

    8/30/2026House

  6. Read third time. Passed. Ordered to the Assembly. (Ayes 29. Noes 10.).

    8/30/2026Senate

  7. Read second time. Ordered to third reading.

    8/28/2026Senate

  8. Read third time and amended. Ordered to second reading.

    8/27/2026Senate

  9. Read second time. Ordered to third reading.

    8/24/2026Senate

  10. Read second time and amended. Ordered returned to second reading.

    8/21/2026Senate

  11. Read third time and amended. Ordered to second reading.

    8/20/2026Senate

  12. Read second time. Ordered to third reading.

    8/13/2026Senate

  13. From committee: Do pass. (Ayes 5. Noes 2.) (August 13).

    8/13/2026Senate

  14. In committee: Referred to APPR. suspense file.

    8/3/2026Senate

  15. Read second time and amended. Re-referred to Com. on APPR.

    6/29/2026Senate

  16. From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 4. Noes 0.) (June 24).

    6/25/2026Senate

  17. From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on REV. & TAX.

    6/17/2026Senate

  18. Referred to Com. on REV. & TAX.

    6/10/2026Senate

  19. In Senate. Read first time. To Com. on RLS. for assignment.

    5/28/2026Senate

  20. Read third time. Passed. Ordered to the Senate. (Ayes 63. Noes 10. Page 5455.)

    5/27/2026House

  21. Read third time and amended. Ordered to third reading. (Page 5273.)

    5/22/2026House

  22. Read third time and amended. Ordered to third reading. (Page 5242.)

    5/21/2026House

  23. Read second time. Ordered to third reading.

    5/18/2026House

  24. Joint Rule 62(a), file notice suspended. (Page 5030.)

    5/14/2026House

  25. From committee: Do pass. (Ayes 12. Noes 2.) (May 14).

    5/14/2026House

Bill Text

  • Chaptered

    9/30/2026

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  • Enrolled

    9/4/2026

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  • Amended Senate

    8/27/2026

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  • Amended Senate

    8/21/2026

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  • Amended Senate

    8/20/2026

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  • Amended Senate

    6/29/2026

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  • Amended Senate

    6/17/2026

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  • Amended Assembly

    5/22/2026

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  • Amended Assembly

    5/21/2026

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  • Amended Assembly

    4/22/2026

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  • Amended Assembly

    3/9/2026

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  • Introduced

    2/19/2026

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