MWM2OTQ4NmFlOWMzMjAzOGE0OWFjNWI2NmU3ZmQ0MjU3Y2U0ZDcwMWMxYWU1 If you think you have been blocked in error, contact the owner of this site for assistance. 102-1125) on February 3, 2023, that makes significant enhancements to a variety of Illinois credit and incentive programs. Now, your competitors are following an automation roadmap to save work and weather economic turbulence. California's partial PPP conformity bill sent to Governor (04-26-21) The California General Assembly has sent AB 80 to the Governor, and he is expected to sign it. Not-for-profit organizations and higher education institutions, Transportation, logistics, warehousing and distribution, Operation and organizational transformation, Blockchain, digital assets & Web3 solutions, Do not sell/share my personal information. MWZiNjQ1YjdmYjEyZDUzZDUyNTVjODI0OGMzN2YyM2YxMWYxNGNmYTA3Yzk2 OTFhMGFmZGQ0YThjYTRlMDNjYWE5NDNlMmI2NjY2ZTFiYTdmNzc0NGFjM2Zj 1577, 2019-2020 REG. Modesto, CA 95350, (209) 527-4220 (phone) eligibility) criteria for receiving a second draw PPP loan for federal income tax purposes under the CAA.13 Although this requirement only applied to second draw PPP loans for federal income tax purposes, it appears to be incorporated as a general limitation for California purposes when determining whether a taxpayer is classified as an ineligible entity under A.B. 2 A.B. There has been no activity, and we can't get good information on when and if it will pass, and what will actually be included in the final bill. View the list of archivedMultistate Tax alerts. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. This measure is part of Californias effort to recover now that the pandemic is easing, state restrictions are lifting, and businesses are moving back towards full operations. Grant Thornton LLP is a member firm of GTIL. 1577, 2019-2020 REG. The new application form for PPP loans under $50,000 only requires borrowers to confirm the PPP-loan proceeds were used for eligible costs, and to provide supporting documentation showing expense payments. Sec. If youd like to discuss tax implications that may be facing your business, contact Osborne Rincon at (760) 777-9805. Credit: Spidell Tax, Analysis, and Education Go Back Print. We do not control the destination site and cannot accept any responsibility for its contents, links, or offers. ZjM5OWM1NmRhZmIzYzYxY2VlZmY4NDExYjhjMDA0YmRlOThjMjBhYjk3Nzkz NDZkZjRjZDY4ODVjMjk3OGE5MjViODBjYjExOTliZWFhNzgwY2FjMTkzYjll Private company boards should bring the backgrounds and insights to understand risks and opportunities and drive the business forward. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Digs with Dignity is on a mission to provide those transitioning from homelessness with custom, fully furnished living spaces that feel like home. 1557 also disallows otherwise allowable credits and deductions for amounts paid or incurred using forgiven loan funds.3 Because California generally conforms to the version of the Internal Revenue Code (IRC) that existed as of January 1, 2015, California did not automatically conform to the CARES Act and subsequent, related federal legislation.4 Absent conformity, the California Legislature anticipated that California businesses could have to pay more than $3 billion in additional taxes attributable to forgiven PPP loans.5 As a result, the California Legislature enacted A.B. 80, deductions for expenses paid using PPP loan proceeds are allowed even when the loan is forgiven provided the taxpayer is not an ineligible entity. Under the legislation, an ineligible entity is a taxpayer that either: (i) is a publicly-traded company; or (ii) does not experience a 25% reduction in gross receipts in an applicable quarter of 2020 as compared to the same quarter in 2019.2, The PPP was created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides forgivable business loans when the recipient meets certain eligibility criteria.3 Under the PPP, qualifying borrowers can apply to have some (or all) of their loan forgiven to the extent it was used for certain expenses such as rent, utilities, mortgage payments, and employee payroll. 80 amends California law to operate more consistently with the federal CAA regarding the permissibility of deductions for expenses paid with forgiven PPP loan proceeds. L. 116-260) was enacted. 1 A.B. ZTI5MDAwNDczOWI5MWMxY2RlNWVhNzcyY2Q3OWVmNmI2N2Y2ODEyZmM1NTYz SESS. To help guide planning, weve highlighted key topics under focus from regulators worldwide and what those developments could mean for business. 1577 and how these changes impact their California tax liabilities. 1557 generally conforms California to federal law allowing an exclusion from gross income for covered Paycheck Protection Program (PPP) loans that are forgiven as a part of the federal Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). Explore Deloitte University like never before through a cinematic movie trailer and films of popular locations throughout Deloitte University. On September 9, 2020, Californias Governor Newsom signed Assembly Bill 1577 (A.B. The documentation must clearly identify both of the reference quarters (if not using annual comparison), must The agreement provides an additional $24 million for financial assistance and services through Housing for the Harvest a program providing support for agricultural workers who have to quarantine due to COVID-19. Note that the citation to the federal law presumably should be 15 U.S.C. A.B. I have already received forgiveness on my second draw, which was thankfully from a different lender, therefore reason 2 of why I was denied is invalid. hb```b``V``e``[ ,@QR40 Mjy{zf9sUnhRn(=vl&G99I\@V7?$vt0Ft 0AU:\l0 c`\=H$X$BCA~'YlxH/t>x If your PPP amount is over $150, 000 and you received your PPP loan through a bank in the SmartBiz network, your bank will be contacting you directly about applying for Forgiveness. 4 CAL. & TAX. On July 4, 2020, Public Law 116-147 extended the authority to guarantee PPP loans to August 8, 2020. Don't let tax be the only deciding factor in your relocation. Please enable JavaScript to view the site. The ARPA expanded the PPP to include certain nonprofit entities and certain internet publishing organizations. For a complete listing of the FTBs official Spanish pages, visit La esta pagina en Espanol (Spanish home page). 1577, 1-3 (stating that [t]his act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect). US affiliates to deem to elect waters edge, California legislature allows group returns for international business travelers. 1577 and how these changes impact their California tax liabilities. 1577, and provides some taxpayer considerations. MTFiZWE1MGQyMjlhOGEzMTY3ODc1ZGE4ODNiNmM1MGQxMzUzYTgxZjQxYTk5 Access from your area has been temporarily limited for security reasons. & TAX CODE 17024.5(a); 23051.5(a). This Google translation feature, provided on the Franchise Tax Board (FTB) website, is for general information only. REV. AB 80 generally conforms to the federal treatment of PPP loan forgiveness and EIDL grants, with one major exception. 297 0 obj <>/Filter/FlateDecode/ID[<681772630396424DB877BF5F6FFE419B>]/Index[276 36]/Info 275 0 R/Length 98/Prev 155748/Root 277 0 R/Size 312/Type/XRef/W[1 2 1]>>stream ODE0ZjA1OTZlMmYzNGViM2E4NWJiYTMwNzQ0N2I2YmVhZTE1MDVlNWJjOTJk AB 80 conformity only applies to the exclusion from income for PPP loan forgiveness and EIDL advance grants. GTIL and each member firm of GTIL is a separate legal entity. By showing up as I am, Im elevating my career. 17 A.B. You can outsource cybersecurity, but you can't outsource your risks. 636(a)(37)(A)(iv)(I)(bb). 6 See CALIFORNIA SENATE COMMITTEE ON GOVERNANCE AND FINANCE ANALYSIS, JULY 24, 2020 (available here); CALIFORNIA ASSEMBLY FLOOR ANALYSIS, AUG. 29, 2020. California Governor Gavin Newsom onApril29 signedinto law legislation that generallyconformsthe states tax treatment of Covid-19 aid in the form of loans and grants with the federalindividual and corporate income tax treatment of such aid, including the CARES Act and the Consolidated Appropriations Act, 2021 (CAA). Cultivating a sustainable and prosperous future, Real-world client stories of purpose and impact, Key opportunities, trends, and challenges, Go straight to smart with daily updates on your mobile device, See what's happening this week and the impact on your business. Modesto, CA 95350, (209) 527-4220 (phone) SACRAMENTO Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon today announced that they have reached an agreement on a package of immediate actions that will speed needed relief to individuals, families and businesses suffering the most significant economic hardship from the COVID-19 Recession. This Tax alert provides a brief overview of the federal legislation relating to the PPP, summarizes the notable changes to California law made by A.B. CODE 17131.8(g)(3); 24308.6(g)(3). You meet the 25% gross receipts reduction qualifications. B expects to apply to the lender for forgiveness of the covered loan in 2021. This message will not be visible when page is activated. According to the legislative analysis, this date was changed to ensure that all fiscal year filers are captured. If you claimed a deduction that you do not qualify for, you must file an amended return using our normal amended return procedures. People are hungry and hurting, and businesses our communities have loved for decades are at risk of closing their doors. For taxpayers other than ineligible entities, A.B. NTU5M2RhOWQwZTM1ZWU5NWE0YmI3YmJjZjMyYWI4M2IxYzcyNDVkMjY1MDc0 The agreement provides $600 in one-time relief to households receiving the California EITC for 2020. Answer: For a Second Draw PPP Loan amount of $150,000 or less, the borrower must provide documentation substantiating the reduction in gross receipts before or at the time the borrower seeks loan forgiveness (or upon SBA request). The web pages currently in English on the FTB website are the official and accurate source for tax information and services we provide. & TAX CODE 24344; 24344.5; 24344.7. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. 1577 attempted to do, A.B. 61; CAL. Please search again using different keywords and/or filters. ZmEwMjJhMjJhYSJ9 A sign calling for student loan debt relief is seen in front of the Supreme Court as the justices are scheduled to hear oral arguments in two cases involving President Joe Biden's bid to reinstate . Acting Governor Eleni Kounalakis Signs Legislation to Support States COVID-19 Preparedness, PHOTOS: Governor Newsom Visits Diablo Canyon Power Plant, More Time to File State Taxes for Californians Impacted by December and January Winter Storms, Governor Newsom on Read Across America Day: While Other States Ban Books, Were Helping Students Read, Governor Newsom Proclaims State of Emergency in 13 Counties Due to Winter Storms, Activates California Guard. For additional information on the RRF grants, visit Section 5003 of the ARPA, RTC 17158.2(a), and SBA guidance. Gavin Newsom signed Assembly Bill 80 (AB 80), which generally conforms to the federal income tax treatment of Paycheck Protection Program (PPP) loan forgiveness and of the deductibility of expenses paid with a PPP loan that is forgiven, with a notable exception. Find out how the technology, banking and asset management sectors are adapting their strategies to handle todays threats. 1577) into law.1 A.B. We can harness the power of people, process, data and technology to transform your companys tax operating model into a strategic function of the business. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Partner, State and Local Tax West Region Leader. Exceptional organizations are led by a purpose. California law excludes PPP loans forgiven under the CARES Act from gross income has been saved, California law excludes PPP loans forgiven under the CARES Act from gross income has been removed, An Article Titled California law excludes PPP loans forgiven under the CARES Act from gross income already exists in Saved items. MTQ4MmJiZjg5ZGY5MWQyZDU2ZmFiZDM1ZmZmZjkyM2E3MDRkYmViZTViM2Yz MjhlMTk5ZGY1MzFiNTZlYzQ5N2ZlMTAyOGIwYzZhZDAwOGU4ZDQ5N2U4Nzlj Here are key facts about the PPP forgiveness process and how it impacts business owners owing less than $50,000. GTIL refers to Grant Thornton International Ltd (GTIL). document.write(new Date().getFullYear()) California Franchise Tax Board. The California Franchise Tax Board (FTB) plans to issueguidanceexplainingqualification and other requirements with respect to AB 80, and it is expected to include guidance for taxpayers that have already filed 2020 California individual or corporate tax returns. At Grant Thornton, we dont just understand your business. According to the Franchise Tax Board, because AB 80 only conforms to the federal PPP loan forgiveness provisions as they were last amended by the Consolidated Appropriations Act of 2021, California does not conform to the extension of the PPP loan program by the PPP Extension Act of 2021 (P.L. MDNjMzZlZmIzYWQ3NjYxMjhiZjg0Y2U1MzE0MjUyMjBhNWEwMzJlYzUwZjc0 Although businesses who do not qualify for an exclusion may fully deduct expenses paid with forgiven PPP loan amounts on their California return, the taxability of the PPP forgiveness will come as a big surprise for many California businesses. These subsidies/grants are subject to California tax, but expenses are fully deductible on the California return. 8 CAL. 17 (A.B. In its May 2021 online issueofFTBTax News,the FTB also instructedtaxpayersthat forgiven PPP loansshould notbeincludedas gross receiptswhen calculating CaliforniasLLCfeeand tax. If your forgiven loan relates to an RRF, you are not required to meet these qualifications to deduct expenses. 80, California Assembly, April 15, 2021. 80) providing greater conformity to federal law regarding the deductibility of expenses paid using forgiven Paycheck Protection Program (PPP) loans.1 Under A.B.