california ppp loan forgiveness spidell

-----BEGIN REPORT----- 80 provides much needed guidance clarifying Californias treatment of deductions for expenses paid with forgiven PPP loan proceeds. the forgiveness of PPP loans. Dana is based in San Jose, California. 1577) into law.1 A.B. 311 0 obj <>stream 636(a)(37)(A)(iv)(I)(bb) was added by Section 311 of Division N of the CAA. ODU0M2JiMTQ1YmRhYjQ5Yjc2ZWQzNTA3Mjc4MDM1OWI3N2RmYmE4YjEzZTI3 On June 30, 2022, AB 194 was enacted which allowed an income exclusion for covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021 (PPPEA)(Public Law 117-6). As the forgiveness of a PPP loan is excluded from gross income, for LLCs, the amount of the forgiven PPP loan amount does not come within the meaning of "total income from all sources derived from or attributable to this state" and should not be included in the computation of the fee. On February 9, 2022, Senate Bill (SB) 113 (Economic Relief) was enacted to allow an income exclusion for Shuttered Venue Operator (SVO) grants provided under CAA for tax years beginning on or after January 1, 2019 and for Restaurant Revitalization Fund (RRF) grants provided under ARPA for taxable years beginning on or after January 1, 2020. The compromise builds on the initiatives in the Governors state budget proposal to provide cash relief to lower-income Californians, increase aid to small businesses and provide license renewal fee waivers to businesses impacted by the pandemic. hVkkF+qe6 Al+vji"3{gYiSZ2e):t z$/=N,zG&F0ihH&h jucN^#VBOZ.fY+n?1o%?}j-]drM5~j?oZQ~|f)?gV~R,.jz2,QzOu"JY[#M}K3_OO^6b^,#lYu7O. OTc5MjdiOWVmNjcwMzYzYTRjZjhmOWI1YmQzZDczMDNkYzZmYjk2Mzk2ZWJi These loans are not forgivable. The agreement reflects a four-fold increase from $500 million to more than $2 billion for grants up to $25,000 for small businesses impacted by the pandemic, and also allocates $50 million for cultural institutions. The new legislation supersedes AB 1577. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. 2 A.B. 3 P.L. 1577, and provides some taxpayer considerations. 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. The agreement provides for two years of fee relief for roughly 59,000 restaurants and bars licensed through the states Department of Alcoholic Beverage Control that can range annually from $455 to $1,235. PPP Loan Forgiveness for Borrowers International China Practice India Practice Latin America Practice Consulting Technology Risk & IT Compliance Strategy & Operations Transactions Specialty Technology Automation Data Analytics & BI Development & Integration Enterprise Systems Technology Products Technology Strategy Automation As a result, it provided no California tax relief for fiscal year taxpayers whose tax year began before January 1, 2020, but who obtained a PPP loan after January 1, 2020. Section 636(a)(37)(A)(iv)(bb), which requires the entity tohave experienced at least a 25% drop in gross receiptsinthe first, second or thirdquarter of 2020, or the fourth quarter if a PPP loan application was submitted on or after January 1, 2021,compared tothe same quarter in 2019. 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. When policy shifts, our insights and analysis can help you plan and respond. 1577 and how these changes impact their California tax liabilities. This box/component contains JavaScript that is needed on this page. GTIL refers to Grant Thornton International Ltd (GTIL). Immediate Relief for Small BusinessesQuadrupled. Ataxpayercannot combinetwo or more2020quarterly losses to arrive at thisthreshold. According to the legislative analysis, this date was changed to ensure that all fiscal year filers are captured. In particular, Californias definition of an ineligible entity borrows its 25% diminution in gross receipts test from the qualification (i.e. Automation used to be a possibility a goal for the future. 21-17) does not apply to either first- or second-draw loans received after March 31, 2021. However, AB 1577 did not allow taxpayers to deduct PPP covered expenses. This will bring conformity to the federal treatment of PPP loan forgiveness and EIDL grants, with one important exception relating to reduction in gross receipts in the 2019-2020 taxable year. %%EOF 1577 attempted to do, A.B. Mr. Grossman specializes as a subject matter expert in California Corporation Income or Franchise Tax matters. Impacted by California's recent winter storms? GTIL and each member firm of GTIL is a separate legal entity. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In September 2020, California enacted AB 1577, which conformed to the CARES Act exclusion from gross income for PPP loan forgiveness. 265 disallows deductions related to tax-exempt income. 19 A.B. This content supports Grant Thornton LLPs marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. The agreement incorporates the Governors Golden State Stimulus plan to assist California households that have borne the disproportionate economic burden of the COVID-19 Recession those with incomes below $30,000, as well as those unfairly excluded from previous federal stimulus payments. To stay logged in, change your functional cookie settings. & TAX. (HTTP response code 503). REV. If this reduction threshold is not met, the expenses cannot be deducted on the California tax return. Generated by Wordfence at Sat, 4 Mar 2023 17:56:39 GMT.Your computer's time: document.write(new Date().toUTCString());. ZmE2MjY1MzQ2MjA0N2IxZDNmNTlhNjdhMDU1ZmY2NjQwYjZiMDRlZDRkZTBm Credit: Spidell Tax, Analysis, and Education Go Back Print. . SESS., 1 (see new CRTC 17131.8(a)), 2 (see new CRTC 24308.6(a)). 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. 13 Specifically, A.B. However, California disallows a credit or deduction for Loan Forgiveness Eligible Expenses to the extent of the Forgiven Loan Amount. 80. It does not apply to SBA subsidies paid on SBA loans, Shuttered Venue Operator Grants, or Restaurant Revitalization Grants. CODE 17131.8(b); 24308.6(b), as amended by A.B. Our NFT Playbook is a roadmap to addressing IP rights, business infrastructure and risk for media & entertainment companies and others. See how. 1577 may consider the need to amend their California return and/or recompute their claimed deductions for expenses paid with PPP loan proceeds that were forgiven. This article provides an introduction to renewable energy tax credits and highlights several key factors that buyers and sellers of these credits should consider. endstream endobj startxref Don't let tax be the only deciding factor in your relocation. 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). Be ready to demonstrate diligence for the FCPA. Taxpayers that have already filed their 2019 and 2020 returns should consider amending these returns to incorporate the adjustments allowed by AB 80. 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. Y2ZjZmQ1NzgyYTlkZmE1NGZmOTRmOTU2ZWE5M2Y5OWRlZTY2NTU3M2QxNmJh 1577, 2019-2020 REG. The information contained herein is general in nature and is based on authorities that are subject to change. Note that the citation to the federal law presumably should be 15 U.S.C. OTFhMGFmZGQ0YThjYTRlMDNjYWE5NDNlMmI2NjY2ZTFiYTdmNzc0NGFjM2Zj The agreement also provides $20 million to reengage students who have either left their community college studies because of the pandemic or to engage students at risk of leaving. Find out how the technology, banking and asset management sectors are adapting their strategies to handle todays threats. 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. 8 CAL. It is unclearhowbusinesses that changed entity types during 2020will apply2019 gross receiptstoqualify for the PPPexpense deduction. The COVID-19 is having a huge impact on the global economy, with manufacturers and the travel industry bearing the initial brunt as the impact expands. He has 22 years of broad-based SALT consulting experience at the national and practice office levels in large public accounting firms. You meet the 25% gross receipts reduction qualifications. Under the express terms of the CARES Act, forgiven loan amounts are excluded from the borrowers gross income.4 All Rights Reserved. 10 CAL. How to solve business problems and mitigate the risks, Make your transformation deliver on its promise. This material may not be applicable to, or suitable for, the readers specific circumstances or needs and may require consideration of tax and nontax factors not described herein. COVID-19 has caused PE firms to adjust their valuation practices postponing valuations to avoid reset triggers, exploring new approaches to valuations or diversifying existing ones. MTFiZWE1MGQyMjlhOGEzMTY3ODc1ZGE4ODNiNmM1MGQxMzUzYTgxZjQxYTk5 7 Ch. We are excited to finally have clarity on Californias PPP loan forgiveness stance. As we continue to fight the pandemic and recover, Im grateful for the Legislatures partnership to provide urgent relief and support for California families and small businesses where its needed most, said Governor Newsom. Y2VmMzUxZjkwZWU4YmYxYWRhYTJlNWMyOTM4MTQ2NGI4MThhNDBmOGNjNmY3 However,AB 80 does not permitanindividual owner or corporation that is anineligible entity to deduct PPP covered expenses. Principal, SALT Services These external alerts highlight selected developments involving state tax legislative, judicial, and administrative matters. Energy companies can get ahead with fiscal discipline, ESG disclosure preparation and attention to cybersecurity, 2022 Energy Symposium speakers say. REV. We are now into the second year of the requirement for most partnerships to file Schedules K-2 and K-3, and the compliance challenges continue. & TAX. 80, largely conforming to Federal rules relating to deductibility of expenses paid with funds from forgiven Paycheck Protection Program. 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). LAW Section 1102 and 1106 of the CARES Act, established the PPP as a new loan program administered by the U.S. Small Business Administration (SBA) as part of its Further, AB 1577 applied only to tax years beginning on or after January 1, 2020. N2Y5N2FjOGU2ZGVmZWI4MDRhNTg4NjNjZjgxYjA2MzBlYjU1MmMzNDY0NTY1 The agreement also reflects fee relief for more than 600,000 barbering and cosmetology individuals and businesses licensed through the Department of Consumer Affairs. OTQyYWYwNjA5N2Y5ZTg1YTcwMGMzNTUyNjE3NjcyYWIzNzk2NzI3OGM4MzM1 636(a)(37)(A)(iv)(I)(bb). CalFresh Student Outreach and Application Assistance. 1577, 2019-2020 REG. We translate some pages on the FTB website into Spanish. 1577, A.B. We do not control the destination site and cannot accept any responsibility for its contents, links, or offers. How does ESG fit into business strategy? 7 For additional details relating to the federal CARES Act and subsequent legislations relating to the PPP, please refer to the Deloitte Heads Up, Volume 27, Issue 8, Highlights of the CARES Act, updated September 18, 2020 (available here). Payroll Protection Program (PPP) loans have been a lifeline to businesses since the onset of COVID-19. If your forgiven loan relates to an EIDL Grant or Targeted EIDL Advance, you are not required to meet these qualifications to deduct expenses. If your forgiven loan relates to an RRF, you are not required to meet these qualifications to deduct expenses. Partner, State and Local Tax West Region Leader. These new provisions provide [f]or taxable years beginning on and after January 1, 2020, gross income does not include any covered loan amount forgiven pursuant to section 1106 of the [CARES Act], pursuant to the [Enhancement Act], or pursuant to the [Flexibility Act].17 For this purpose covered loan is defined as having the same meaning as in section 1106 of the [CARES Act].18 Thus, the Forgiven Loan Amount is not included in gross income for PITL or CTL purposes. By: Pedro T. Rincon, CVA, Partner Osborne Rincon CPAs. x000K@4CgCGt@1: L%v5Fo- j-YW v Exceptional organizations are led by a purpose. 4 CAL. The measure awaits the governor's signature. This will bring conformity to the federal treatment of PPP loan forgiveness and EIDL grants, with one important exception relating to reduction in gross receipts in the 2019-2020 taxable year. Friday, September 18th, 2020. 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. 2021-20 for federal purposes, we will follow the federal treatment for California tax purposes. YjA1NTM0ZGYzOWRkOTM0Yjg0MTQ3Mzc5MzhlNzQ1Y2UwOTA0Y2ZlODFkZjdi Illinois Governor J.B. Pritzker signed new legislation (P.A. The agreement also provides $12 million in state funds to support associated county administrative workload. Governor Gavin Newsom has signed Assembly Bill 80, to amend the law. By showing up as I am, Im elevating my career. On September 9, 2020, Californias Governor Newsom signed Assembly Bill 1577 (A.B. News Spidell's California Minute . Together with PitchBook, we give you the focused insights to take advantage of the trends. Joshua Josh is a State and Local Tax (SALT) Principal in the San Francisco office of Grant Thornton LLP. This content supports Grant Thornton LLPs marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. 211 0 obj <> endobj 636(a)(37)(A)(iv)(I)(bb). & TAX CODE 24271. This is alyx our streamlined concierge-enabled platform that connects real problems with the right resources and real solutions. 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. 80) providing greater conformity to federal law regarding the deductibility of expenses paid using forgiven Paycheck Protection Program (PPP) loans.1 Under A.B. 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. (%mu9YS-+e"D3mU3]3|.efah4Yi^=|jmMg16^2*5+Qh . Sign up to receive the latest BDO news and insights. 1577 or other California tax matters, please contact any of the following Deloitte professionals: Roburt Waldow, principalMultistate, Deloitte Tax LLP, Washington National Tax, +1 612 397 4487, Christopher Campbell, principalMultistate, Deloitte Tax LLP, Washington National Tax, +1 213 553 3072, Valerie Dickerson, partnerMultistate, Deloitte Tax LLP, Washington National Tax, +1 202 220 2693, Kathy Freeman, managing directorMultistate, Deloitte Tax LLP, Sacramento, +1 916 288 3392, Shirley Wei, senior managerMultistate, Deloitte Tax LLP, Washington National Tax, +1 213 553 1715. Below are key provisions of the Immediate Action Agreement: Direct Relief to Individuals and Families. 5 IRC Sec. Your access to this service has been limited. Now, your competitors are following an automation roadmap to save work and weather economic turbulence. Overview. The owner of this site is using Wordfence to manage access to their site. %PDF-1.6 % Tax laws are ever-changing, which is why you need proficient tax professionals working with you and your business to ensure you are in compliance with the current tax laws. 17 (A.B. GTIL does not deliver services in its own name or at all. Additionally, A.B. California Rebuilding Fund Small businesses may be eligible for a loan up to $100,000 from the California Rebuilding Fund. (CAL. ZTg2N2Y3NGIyZGIwODA1ODY4OWI3ZDYzNWNjOTk5OTUyZmU4YTllMzc2OTVj The fourth quarter of 2020 and 2019 only becomes a measure in this test if taxpayers submit their PPP loan application on or after January 1, 2021. Lauren is a senior associate working in the Washington National Tax practice of Deloitte Tax LLP. Sec. YWFjZWQ2YzBhMWI1ZWY2ZDgwYmYxYzVmNDY5OTYxYTNkOTUyMTJlNzk0YTZk YjFhOWM4Y2FkNDM3NWJjM2ZmZjE2YmFmNjhlNjc3MDJjM2Q3NjJhMmE1NDgz 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. endstream endobj startxref and CTL purposes. Drive maximum value across your supply chain. 80, some California taxpayers may have either filed their 2020 returns prior to its enactment, or made an extension payment based on the provisions of A.B. ZmU1YzEwNzA1MTAyYzc0ODZiODFlZjZkNTUzYmQ2YzFmNmVlOTA2M2JlM2Y3 Banks face new challenges on regulation, ESG, mortgages, digital assets, audit, tax or digital transformation in 2022. Executives are advised to pay special attention to emerging trends that will shape how boards and investors talk about ESG in 2021. MzA1NjUwNDUyNzBkY2M0YTcxMWY2NGYzZjRhMzk3NGVkODkwNWRlNjQ0YWY2 SB 113 also allows the deduction of expenses, basis adjustments, and tax attribution adjustments for qualifying taxpayers for SVO and RRF grants. Proc. California conforms to the federal gross receipts test requiring a 25% or greater reduction in gross receipts and will therefore follow the rationale of this related federal guidance. Please search again using different keywords and/or filters. KServicing stated they were 1.) 1577 which had previously denied the deductibility of expenses paid with forgiven PPP loan proceeds. For tax yearsbeginning in2019,qualifyingtaxpayers cannowexclude PPP loanforgivenessorEIDL grants fromCalifornia gross incomeanddeductallowablecoveredexpenses paid withPPP loan or EIDL grant proceeds. SESS. For taxpayers other than ineligible entities, A.B. Y2NjYmFmZTQyOGZhYjViZTYxMTQ0ODRiYWY5OGVkNzNlOWI1NWY0YzU0ZDVl Specifically, the new law states that [a]ny credit or deduction otherwise allowed under this part [(Part 10 for the PITL and Part 11 for the CTL)] for any amount paid or incurred by the taxpayer upon which this exclusion is based shall be reduced by the amount of the exclusion allowed under this section.19. Our audits ensure confidence in our clients financial information. 1577, addressing the treatment of PPP loans for tax years beginning on and after Jan. 1, 2020.7 Consistent with IRS Notice 2020-32, this legislation generally provided that forgiven PPP loan amounts would be excluded from the borrowers gross income, but that associated deductions would not be allowed for expenses paid with forgiven PPP loans. View the list of archivedMultistate Tax alerts. The American Rescue Plan Act (ARPA) (Public Law 117-2) was enacted on March 11, 2021. At Grant Thornton, we dont just understand your business. 636(a)(37)(A)(iv)(I)(bb).10 Generally, to satisfy the gross receipts requirement, a taxpayer must have experienced a 25% or greater reduction in quarterly gross receipts for the first, second or third quarters of 2020 as compared to the same quarter of 2019.11 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. The payments will be provided to these households shortly after they file their 2020 tax returns. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. If you believe Wordfence should be allowing you access to this site, please let them know using the steps below so they can investigate why this is happening. MGI4ODNkMGY5N2YxNzFmNjdlOWM5ZDYzNjFiMDIzZmZmMTNlMWUzMTg2NWEy 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). A diversity, equity and inclusion video series. Credit: Spidell Tax, Analysis, and Education, 200 West Roseburg Avenue This is important new information that needs to be shared with businesses immediately and it will likely come as a surprise to many. The path to quality loyalty programs begins with adopting the right analytics looking deeper into customer purchase patterns to uncover true trends. Friday, September 25th, 2020. 13 See I.R.C. NDEyZDM0YmQ2MzdjM2I1OTg1YmYxMTdhYzE2OWE5MWEyMjJkYTM5ZTg4ZjYw AB 80 uses the same 25% gross reduction threshold qualification that was used for second draw PPP loans. 2023 Grant Thornton LLP - Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. 1577 adds two identical California tax provisionsCalifornia Revenue & Taxation Code (CRTC) section 17131.8 under the Personal Income Tax Law (PITL) and CRTC section 24308.6 under the Corporation Tax Law (CTL). This isnt the tech you know. Cybersecurity can never rest. & TAX. California aligning with fed PPP loan treatment. Social login not available on Microsoft Edge browser at this time. 1577, 2019-2020 REG. 2 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. On April 29, 2021 Governor Newsom signed California A.B. NDZkZjRjZDY4ODVjMjk3OGE5MjViODBjYjExOTliZWFhNzgwY2FjMTkzYjll & TAX. In addition, the agreement provides a $600 one-time payment to taxpayers with Individual Tax Identification Numbers (ITINs) who were precluded from receiving the $1,200 per person federal payments issues last spring and the more recent $600 federal payments. Matt Tierney and Andre Bourgon from Grant Thornton discuss how to execute a winning ecosystem strategy to manage insurance companies. ZDE5MjljNTlmOGNmNzlmYTg5MGFiZWU3MjM1M2I1Yjg2OTA3NzZmYmU3NmFi 15 U.S.C. In response to the IRSs guidance, Congress enacted the Consolidated Appropriations Act, 2021 (CAA) on Dec. 27, 2020, to allow greater deductibility of expenses paid with forgiven PPP loan proceeds.6 This federal response more broadly allows for the deductibility of expenses paid with forgiven PPP loan proceeds. Do not delete! 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. Ineligible entities are either publicly tradedcompanies orentities that do not meet the requirements of 15 U.S.C. If you have additional questions about this article or your business qualification status, contact your GC accountant or email us at contactus@gccpas.net. You can also read the documentation to learn about Wordfence's blocking tools, or visit wordfence.com to learn more about Wordfence. These pages do not include the Google translation application. 229 0 obj <>/Filter/FlateDecode/ID[<53445A688FC0F84BB5871A6886EB3172>]/Index[211 40]/Length 93/Prev 93697/Root 212 0 R/Size 251/Type/XRef/W[1 3 1]>>stream 2 Under the Consolidated Appropriations Act, 2021, as referenced in A.B. SESS., 1 (see new CRTC 17131.8(c)), 2 (see new CRTC 24308.6(c)). On September 9, 2020, California's Governor Newsom signed Assembly Bill 1577 (A.B. 80), Laws 2021. 1577. 80's treatment of expenses paid with forgiven loan proceeds A.B. Borrowers that need assistance or have questions should call the SBA at (877) 552-2692, Monday - Friday, 8 a.m. - 8 p.m. EST. ZGU2YzllYThlZmU0NDllMTQxZDgyMWZmZWNlNGNkNjliYzNkMjQyNTQ1YWFj Yjk1NTlhZjUzMmI3ODFlN2VlZDM3OWQ5OWM1ZDgzYmM3NTgyMWVkZjViZTQy GTIL is a nonpracticing umbrella entity organized as a private company limited by guarantee incorporated in England and Wales. On September 9, 2020, Assembly Bill (AB) 1577 (Coronavirus Aid, Relief, and Economic Security (CARES) Act Conformity) was enacted which allowed an income exclusion for tax years beginning on or after January 1, 2020, for forgiven PPP loans. 1577 added new corporate and income tax statutes providing that [a]ny credit or deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which this exclusion is based shall be reduced by the amount of the exclusion allowed under this section.8, A.B. Grant Thornton LLP is a member firm of GTIL. 80 defines an ineligible entity in part as a taxpayer that does not meet the reduction from the gross receipts requirements of Section 636(a)(37)(A)(iv)(bb) of Title 15 of the United States Code, as added by Section 311 of Division N of the Consolidated Appropriations Act, 2021 (Public Law 116-260). See CAL. But yesterday, the Calfornia Senate approved AB 80, which would make forgiven PPP loans tax-deductible - and give businesses a breather. California law does not conform to this expansion of PPP eligibility. The agreement provides roughly $6 million to support outreach and application assistance to University of California, California State University and California Community College students made newly eligible for CalFresh the state-administered federal program for supplemental food assistance. 116-139, the Enhancement Act).8 The federal government also enacted the Paycheck Protection Program Flexibility Act (P.L. The PPPEA was enacted on March 30, 2021 and extended the covered period of the PPP from March 31, 2021, through June 30, 2021. 11 See 15 U.S.C. DTTL and each of its member firms are legally separate and independent entities. The PPPEA was enacted on March 30, 2021 and extended the covered period of the PPP from March 31, 2021, through June 30, 2021. PPP Forgiveness: Urgent News About Nonconformity in California, Key Tax Credits Have Expired: What This Could Mean for You, 79245 Corporate Centre Drive, La Quinta, CA 92253. 1577), Laws 2020. On Sept. 9, 2020, which was after the IRS released Notice 2020-32 but before the CAA was signed, California enacted legislation, A.B. MjhlMTk5ZGY1MzFiNTZlYzQ5N2ZlMTAyOGIwYzZhZDAwOGU4ZDQ5N2U4Nzlj Copyright 2023 BDO USA LLP. Manufacturers need a two-pronged approach to manage risks. Gavin Newsom signed Assembly Bill 80 (A.B. Careful consideration will need to be given to these issues, as well as the need for documentation to support that the 25% diminution in gross receipts requirement of A.B. NmIyNjRmZjA0MDdkNzU5Y2IwOGU3MjMzZTk5MTBkNmQwYTY0OTQ3YTg3ODc1 Our response tackles the human and the economic impacts of COVID in a way that echoes President Bidens American Rescue Plan and will help those who are hurting most. The agreement would provide the $600 payments to households with ITINs and income below $75,000. hbbd``b`?`\@ "$@b Bq@S my S{.$4VP&F% 1FrO G The alerts provide a brief summary of specific multistate developments relevant to taxpayers, tax professionals, and other interested persons. 1557 to provide some relief.6, On March 27, 2020, the federal government enacted the CARES Act in response to the COVID-19 pandemic.7 Sections 1102 and 1106 of the CARES Act amend section 7(a) of the Small Business Act to create the PPP, through which up to $349 billion in funding was provided to businesses through federally guaranteed loans. Spidell Publishing one of Californias leading continuing education organizations is reporting that the PPP loan forgiveness exclusion enacted by AB 80 (Ch.