(a) “Household income” means all income, as defined in subdivision (b), received by any member of a household while that member is or was a member of that household.

(b) “Income” means adjusted gross income, as defined in Section 17072, plus all of the following cash items:

(1) Amounts contributed on behalf of the contributor to a tax-sheltered retirement plan or deferred compensation plan.

(2) Annual winnings from the California Lottery in excess of six hundred dollars ($600) in the current calendar year.

(3) Exempt interest received from any source.

(4) Gifts and inheritances in excess of three hundred dollars ($300), other than transfers between members of the household. Gifts and inheritances shall include noncash items.

(5) Life insurance proceeds to the extent that the proceeds exceed the expenses incurred for the last illness and funeral of the deceased spouse of the claimant. “Expenses incurred for the last illness” shall include unreimbursed expenses paid or incurred during the income calendar year and any expenses paid or incurred thereafter up until the day the claim is filed. For purposes of this paragraph, funeral expenses shall not exceed five thousand dollars ($5,000).

(6) Nontaxable amount of any pensions and annuities.

(7) Nontaxable gain from the sale of a residence, as defined in Section 121 of the Internal Revenue Code.

(8) Nontaxable military compensation as defined in Section 112 of the Internal Revenue Code.

(9) Nontaxable scholarship and fellowship grants as defined in Section 117 of the Internal Revenue Code.

(10) Public assistance and relief.

(11) Railroad retirement benefits.

(12) Sick leave payments.

(13) Social Security benefits (not including Medicare benefits).

(14) Temporary workers’ compensation payments.

(15) Unemployment insurance payments.

(16) Veterans’ benefits.

(17) If an alternative minimum tax is required to be paid pursuant to Chapter 2.1 (commencing with Section 17062) of Part 10, the amount of the alternative minimum taxable income, regardless of whether or not that amount is held in cash, in excess of the regular taxable income otherwise applicable.

(c) Net business loss, net rental loss, net capital loss, or other net losses, amounts deducted for depreciation, or other noncash expenses shall not be deducted in calculating adjusted gross income for purposes of this section.

(d) For purposes of this chapter, income shall be determined for the calendar year immediately preceding the fiscal year for which deferment is claimed pursuant to this chapter.

(Added by Stats. 2011, Ch. 369, Sec. 3. (AB 1090) Effective January 1, 2012.)