Proposed retroactive CA changes

Technical topics regarding tax preparation.
#1
Posts:
886
Joined:
26-Feb-2016 10:14pm
Location:
Oakland CA
Too late to help my cash basis s corp client who sold out for big bucks in 2021.

Would have had to pay the CA pass thru tax in 2021 to get the Fed deduction.

Didn't do that because of the stupid CA limit on the tax credit to the CA AMT and the rest was not refundable.

Since my s corp client would not have been able to use resulting CA credit carry over within 5 years, decided not to do it.

Now this. Grrrrrr

SPIDELL
Tax • Analysis • Education

Governor proposes major retroactive tax relief (01-11-22)
As part of his proposed budget, Governor Newsom is advocating for significant tax relief, including, but not limited to:
• Expanding the Passthrough Entity Elective Tax Credit by eliminating the tentative minimum tax limitation and allowing disregarded entities, including single-member LLCs, to claim the credit. The Governor is requesting that this be enacted by March 15, 2022;
• Retroactively conforming to the American Rescue Plan Act’s exclusion of Restaurant Revitalization Grants and Shuttered Venue Operator Grants, but still allowing these grant recipients to deduct expenses paid with these grants. Again, the Governor is proposing this be enacted by March 15, 2022. However, there is no mention in the Governor’s proposal of conforming to the federal exclusion of Paycheck Protection Program loans for loans made after March 31, 2021;
• Eliminating the NOL suspension and $5 million business credit limitation for the 2022 taxable year; and
• Providing penalty and interest relief for families with $150,000 in adjusted gross income ($75,000 for individuals) unable to timely pay their 2019–2021 tax liabilities. These taxpayers would be given until September 30, 2023, to make their payments.
These are still only proposed changes, but tax professionals should identify which of their clients might benefit from these proposals and should consider holding off filing these returns to see if these items will actually be enacted.
The Governor’s proposed budget summary can be found at:
http://www.ebudget.ca.gov/2022-23/pdf/B ... ummary.pdf
________________________________________
Attend Spidell's 2021/2022 Federal and California Tax Update webinar and get everything you need to be ready for tax season. Click here and register today.

Please add flashemail@spidell.com to your address book to ensure that our e-mails reach your inbox. Disclaimer: The information presented in this e-mail is provided for informational purposes only and does not constitute legal advice.
© 2022 Spidell Publishing, Inc.
 

Return to Taxation



Who is online

Users browsing this forum: alwayslost, ChrisGCPA, CPA1, golfinz, Google Adsense [Bot], Jeff-Ohio, JoJoCPA, kyle242gt, lckent, rbynaker, TaxDude, TAXMASTER, taxtothebest, Terry Oraha, Treetopclimes, William S, zl28 and 198 guests