PDF Part III Administrative, Procedural, and Miscellaneous (Also Part I. 161) The Governor's budget proposes to exempt the RRF and SVOG grants from state taxation by conforming the state tax laws to federal law. Do not include Social Security numbers or any personal or confidential information. 80 relating to PPP loans Tax Alert Overview On April 29, 2021, the California Governor signed A.B. Friday, June 19th, 2020. Podcast: President Biden's proposed tax changes. Download pdf (92.4 KB) KPMG's This Week in State Taxproduced weekly by KPMG's State and Local Tax practicefocuses on recent state and local tax developments. California PPP conformity Status : taxpros - reddit State Tax Conformity of PPP Loan Forgiveness and Related - Weaver States that conform to a post-CARES Act but pre-Consolidated Appropriations Act version of the IRC are generally on track to exclude forgiven PPP loans from taxable income but deny the deduction for related expenses. The IRS hasn't issued specific guidance about including GSS payments as income for federal purposes. Even beyond the question of conformity dates, there has been a great deal of uncertainty surrounding the state tax treatment of forgiven PPP loans due to the way the federal government provided for the nontaxability of forgiven PPP loans. Subscribe to get insights from our trusted experts delivered straight to your inbox. Relief grants that are taxable for federal purposes but excluded from California income should be reported as other deductions on the CA return. California Conforms to Federal PPP Loan Forgiveness Rules The package includes an agreement to partially conform California's tax law to the new federal tax treatment for loans provided through the Paycheck Protection Plan (PPP). For taxable years beginning on or after January 1, 2019, California law allows an exclusion from gross income for covered loan amounts forgiven under the federal CARES Act, Paycheck Protection Program and Health Care Enhancement Act, Paycheck Protection Program Flexibility Act of 2020, the CAA or PPPEA. In February, the Governor signed into law a comprehensive package of immediate actions that sped up much-needed relief to businesses suffering the most significant economic hardship due to COVID-19 a package that provided $2.5 billion in grants worth up to $25,000 each for small businesses across California, more than half of which have gone to minority and underserved businesses. If Proposition 30 had passed, the tax rate on individuals making more than $2 million would have increased from 13.3% to 15.05%. The instructions below assume you've already entered the grant as Other Income on the federal return. Newsom and legislative leaders released the following statement updating the status of PPP conformity . document.write(new Date().getFullYear()) California Franchise Tax Board.
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