San Francisco Tax Preparation / CPA: CA – Report of 2020 federal laws enacted through December 2020 released

Filed in CCH NEWS FEED by on March 24, 2021

The California Franchise Tax Board (FTB) has released a report of 2020 federal income tax changes enacted prior to December 2020 and their impact for California tax purposes. The report analyzes changes made by the following federal laws:

  • Families First Coronavirus Response Act (P.L. 116-127);

  • Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136);

  • Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139); and

  • Paycheck Protection Program Flexibility Act of 2020 (P.L. 116-142).

The FTB’s analysis of federal laws enacted in December 2020 will be available in April 2021.

California passed a law that provides an exclusion from gross income for amounts of covered loans that are forgiven under section 1106 of the CARES Act. California also conforms to special rules under the CARES Act for the use of retirement funds. California does not conform to most of the other changes made by the above laws. Changes to which California does not conform include those in the CARES Act relating to net operating losses, the limitation on excess business losses for noncorporate taxpayers under IRC Sec. 461(l), and the limitation on business interest deductions under IRC Sec. 163(j). Summary of Federal Income Tax Changes, California Franchise Tax Board, January 14, 2021