CA tax - Linkenheimer LLP CPAs & Advisors

Partial Conformity to PPP Loan Tax Rules for California

Yesterday, Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon 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.

The package includes an agreement to partially conform California’s tax law to the new federal tax treatment for loans provided through the Paycheck Protection Plan (PPP). More than 750,000 PPP loans were taken out by California small businesses. The agreement allows companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility.

This tax treatment would also extend to the Economic Injury Disaster Loans.

While the legislative language has yet to be published, this package is expected to be part of an early budget action that is quickly passed and signed by the governor. Similar proposals have emerged in the Legislature, namely AB 281 (Burke), […]

By Linkenheimer LLP|2021-02-18T22:32:01+00:00February 18th, 2021|ca, CA tax, california, New Tax Laws, ppp|0 Comments

FTB Notices Regarding 2019 Tax Return Change

We will likely see an increase of FTB notices over the next few weeks for individuals that made 2019 CA extension payments after 4/15/2020. Our firm recently called on two notices and per the FTB representative, 2019 extension payments received after 4/15/20 automatically got applied to 2020 due to a system limitation. This will result in a difference between tax paid per the return filed and FTB records equal to the extension payment (and a notice indicating this). The FTB is in the process of applying 2019 extension payments received after 4/15 to 2019 and no action is needed. If you have questions, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2020-12-30T22:24:09+00:00December 30th, 2020|CA tax, estimated tax payments, extension, extensions, ftb|0 Comments

What Tax Records Can You Throw Away?

October 15 was the deadline for individual taxpayers who extended their 2019 tax returns. (The original April 15 filing deadline was extended this year to July 15 due to the COVID-19 pandemic and the October 15th deadline was also extended for some in California due to fires and federally declared emergencies.) If you’re finally done filing last year’s return, you might wonder: Which tax records can you toss once you’re done? Now is a good time to go through old tax records and see what you can discard.

The general rules

At minimum, you should keep tax records for as long as the IRS has the ability to audit your tax return or assess additional taxes, which generally is three years after you file your return. This means you potentially can get rid of most records related to tax returns for 2016 and earlier years.

However, the statute of limitations extends to six years for taxpayers who understate their adjusted gross income (AGI) by more than 25%. What constitutes an understatement may go beyond simply not reporting items of income. So a general rule of thumb is to save tax records for six years from […]

By Linkenheimer LLP|2020-10-27T15:55:07+00:00October 27th, 2020|CA tax, california, filing deadline, individuals|0 Comments

California Tax Updates for 10/2

Post 1:

California expands its professional exemption. Effective Sept. 9, 2020, this exemption is expanded to include employees who provide instruction for a course or laboratory at colleges and universities in CA. To qualify, an individual must satisfy the duties test and salaries test. Employees must earn the monthly equivalent to no less than twice the state minimum wage in which the employee is employed for at least 40 hours per week, or a minimum salary in 2020 of $117 per classroom hour. In 2021, this hourly rate rises to $126 and in 2022 to $135. Beginning in 2023 the rate will be adjusted based on the state minimum wage. Contact your Linkenheimer CPA with questions.

Post 2:

The California Franchise Tax Board (FTB) is hoping to increase the number of Californians who receive the CA earned income tax credit. The FTB is required to analyze and develop a plan to increase the number of claims of the CA earned income tax credit, […]

By Linkenheimer LLP|2020-10-02T17:27:26+00:00October 2nd, 2020|ca, CA tax, california, credit, ftb, income tax, state income|0 Comments

California Tax Updates for 9/24

Post 1:

Changes are being made in how California determines whether a worker is an employee or an independent contractor. Under the CA Labor Code, effective 9/4/2020, a three-part test is required, commonly known as the ABC test, to determine the correct status of workers for purposes of following the Labor Code, the Unemployment Insurance Code and the wage orders of the Industrial Welfare Commission. The amended Labor Code also exempts certain specified occupations and business relationships from the application of the ABC test, in which case, a multifactor test previously adopted by the CA Supreme Court is applied.

Post 2:

California issues a guide that explains taxpayer options for disaster relief. The CA Dept. of Tax and Fee Administration (CDTFA) has issued a three-page brochure, “Disaster Relief Tax Guide,” that provides information on the types of free assistance available from the CDTFA to taxpayers and feepayers when disaster strikes. Other taxing agencies that provide assistance include: the Franchise Tax Board, the Employment […]

By Linkenheimer LLP|2020-09-24T21:23:31+00:00September 24th, 2020|business, ca, CA tax, california, disaster, tax planning|0 Comments