Personal Income Tax Law: deferred compensation: exclusions: long-term qualified tuition program.

Senator Niello's legislation aligns California tax law with federal provisions by exempting certain distributions from qualified tuition programs that are directly transferred to Roth IRAs. The bill modifies the Revenue and Taxation Code to exclude these transfers from gross income when made between January 1, 2025, and January 1, 2030.

The measure applies specifically to distributions from long-term qualified tuition programs, including California's Golden State Scholarshare Trust, when funds move directly between trustees to Roth IRAs. It maintains existing reporting requirements, mandating that institutions file documentation with both federal authorities and California's Franchise Tax Board.

To facilitate implementation, the legislation takes effect immediately as a tax levy under the California Constitution. The bill's findings indicate its purpose is conforming state law with federal changes to simplify tax preparation for California residents who utilize these transfers.