![]() For a complete listing of the FTB’s official Spanish pages, visit La página principal en español (Spanish home page). These pages do not include the Google™ translation application. We translate some pages on the FTB website into Spanish. If you have any questions related to the information contained in the translation, refer to the English version. Any differences created in the translation are not binding on the FTB and have no legal effect for compliance or enforcement purposes. The web pages currently in English on the FTB website are the official and accurate source for tax information and services we provide. Consult with a translator for official business. This Google™ translation feature, provided on the Franchise Tax Board (FTB) website, is for general information only. Report any allowable deductions on your original return. ![]() Use the information below to determine your filing path. 25% reduction from gross receiptsĬalifornia 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.įor additional information, visit Section 311 of the CAA, 2021, Revenue and Taxation Code (RTC) section 17131.8(g)(3)), and Small Business Administration (SBA) guidance.įor additional information on the RRF grants, visit Section 5003 of the ARPA, RTC 17158.2(a), and SBA guidance. For federal qualifications regarding income tax treatment, visit Coronavirus Tax Relief for Businesses and Tax-Exempt Entities. The treatment of deductions, basis, and tax attributes for California income tax purposes may differ from the federal income tax treatment. If your forgiven loan relates to an RRF, you are not required to meet these qualifications to deduct expenses. You meet the 25% gross receipts reduction qualifications.Your business cannot be publicly traded. ![]() To qualify for expense deductions, basis adjustments, and lack of reduction of tax attributes related to an SOV grant under SB 113, you must meet the following qualifications. If your forgiven loan relates to an EIDL Grant or Targeted EIDL Advance, you are not required to meet these qualifications to deduct expenses. You meet the 25% gross receipts reduction qualifications.Your business cannot be publicly traded.To qualify for expense deductions, basis adjustments, and lack of reduction of tax attributes related to AB 80, you must meet the following qualifications. Income exclusionįor California purposes, forgiven PPP loans, SVO grants, and RRF grants are excluded from gross income. On September 29, 2022, AB 158 was enacted to add an operative date of Janufor the PPPEA to ensure taxpayers that had loans made during PPPEA would be eligible for the income exclusion and other applicable tax treatment. The PPPEA was enacted on Maand extended the covered period of the PPP from March 31, 2021, through June 30, 2021. 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). SB 113 also allows the deduction of expenses, basis adjustments, and tax attribution adjustments for qualifying taxpayers for SVO and RRF grants. 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 Januand for Restaurant Revitalization Fund (RRF) grants provided under ARPA for taxable years beginning on or after January 1, 2020. California law does not conform to this expansion of PPP eligibility. The ARPA expanded the PPP to include certain nonprofit entities and certain internet publishing organizations. The American Rescue Plan Act (ARPA) (Public Law 117-2) was enacted on March 11, 2021. On April 29, 2021, AB 80 (Consolidated Appropriations Act (CAA) Conformity) was enacted which allowed the additional income exclusion for second draw PPP loans and Economic Injury Disaster Loan (EIDL) advance grants and allowed the deduction of expenses, basis adjustments, and tax attribution adjustments for qualifying taxpayers, for tax years beginning on or after January 1, 2019. ![]() 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.
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