Author: Wendy Klein CPA Professional Corporation |
Some good news! After months of back and forth, California has finally passed some PPP conformity legislation and the governor has signed it. So we can finally get on with the business of computing California returns. But of course, they have added a level of complexity that requires some additional calculations and have not yet given guidance on how compliance with the new rules must be documented. Below are the key points that will be applicable.
DIY or do-it-yourself activities are a great test of creativity and an excellent opportunity to save a little money. Doing things yourself can also be therapeutic or fun. However, as the DIY craze catches on, many believe just by watching a couple of YouTube instructional videos, all tasks can be completed swiftly and economically as a DIY, even the sometimes complicated task of filing tax returns for small businesses.
I’m Wendy Klein, the proud owner of Wendy Klein CPA Professional Corporation. I look forward to sharing my story. I hope that you will enjoy getting to know me better.
The FTB has just clarified that EIDL (Economic Injury Disaster Loan) advance grants are taxable to California. AB 1577 (Ch. 20-39) enacted a California exclusion for PPP loan forgiveness, essentially mirroring the federal exclusion adopted by the CARES Act. However, the federal exclusion for EIDL grants was enacted by the Consolidated Appropriations Act, which California has not conformed to. California would have to enact new legislation to conform to this exclusion.
Legislation has been introduced (AB 281) that declares the intent to conform California law to the federal law allowing the deduction of expenses paid with forgiven PPP debt. The author of the bill is Assemblywoman Autumn Burke, the chair of the Assembly Revenue and Taxation Committee. She is also the author of last year’s bill AB 1577 (Ch. 19-39), which excluded from taxable income any cancellation of debt income arising from PPP loan forgiveness, but required that deductions for expenses paid with the PPP loan forgiveness amount be reduced.