pass-through - Linkenheimer LLP CPAs & Advisors

California Tax Updates for 11/17

Update 1:

The rules for property tax appeals in California have changed. Effective June 21, 2021, four rules for tax appeals in CA changed, involving: petitions for redetermination; innocent spouse relief; rules for rescheduling or postponing appeals; and filing documents. These rules are classified as Rule 100 changes, which means they have no regulatory effect. The rule changes were made because the CA State Board of Equalization’s Board Proceedings Division has physically moved to a new location. The mailing address hasn’t changed. The appropriate email address for appeals-related communication is appealsscheduling@boe.ca.gov or fax to: (916) 324-3984. Here’s more: https://bit.ly/3kp5PHj

Update 2:

The passage of California Assembly Bill 150 in July 2021 brought many changes effective for taxable years beginning in 2021 (but before 2026). One is the Small Business Relief Act, which allows qualified pass-through entities (PTEs) to annually pay an elective tax of 9.3% of the pro rata […]

By Linkenheimer LLP|2021-11-17T16:56:24+00:00November 17th, 2021|business, property tax|0 Comments

California Pass-Through Entity Tax

Governor Gavin Newsom signed Assembly Bill 150 this past July. The new bill establishes an elective pass-through entity (PTE) tax framework that will allow California taxpayers to obtain relief from the current $10,000 limit on individual state and local tax deductions.

Qualifying pass-through entities include partnerships (publicly traded partnerships aren’t included) or S Corporations.

Qualifying entities must exclusively have partners/shareholders/members that are corporations, individuals, fiduciaries, estates, or trusts.
For tax years beginning on or after January 1, 2021 and before January 1, 2022
- PTE tax is due on or before the filing date of the original return. (March 15, 2022 for 12/31/2021 year-end entities)
For tax years beginning on or after January 1, 2022 and before January 1, 2026
- The greater of 50% of the elective tax paid in the prior year or $1,000 is due by June 15^th of the tax year.
- The remaining PTE tax is due on or before the filing due date of the original return.
The election must be made every year but once made, it is irrevocable.
The tax is 9.3% of qualified net income.
The PTE tax is in addition to other entity level taxes […]

By Linkenheimer LLP|2021-08-10T23:06:09+00:00August 10th, 2021|ca, CA tax, california, entity|0 Comments