Taxable Year 2006 - California Conformity to Federal Law
In general, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2005. However, there are differences between California and federal law. Also, please note that California does not always conform to all of the provisions of a federal public law. For example, California does not conform to certain provisions of the American Jobs Creation Act (AJCA) of 2004 (P.L. 108-357). Also, California in general does not conform to the provisions of the Katrina Emergency Tax Relief Act of 2005 (P.L. 109-73).
The Heroes Earned Retirement Opportunities Act (P.L. 109-227) is applicable for California purposes. Some provisions of the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) and the Pension Protection Act of 2006 (P.L. 109-280) are also applicable for California purposes. California conforms to the federal Pension Protection Act change, applicable for taxable year 2006, that allows tax-free distribution from traditional and Roth IRAs from taxpayers who are age 70 ½ or older of up to $100,000 for charitable contribution purposes. (This change is for tax years 2006 and 2007 only.)
We provide an annual report (Summary of Federal Income Tax Changes) to the legislature on or before January 10th of each year (unless federal changes are enacted late in the year) concerning changes to federal tax law. See below for the Summary of Federal Income Tax Changes.
Taxable Year 2005 - California Conformity to Federal Law
In general, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2005. However, there are continuing differences between California and federal law. It should be noted that California does not always conform to the entire provisions of a public law. For example, California does not conform to certain provisions of the American Jobs Creation Act (AJCA) of 2004 (P.L. 108-357). Also, California in general does not conform to the provisions of the Katrina Emergency Tax Relief Act of 2005 (P. L. 109-73).
Also see: Conformity-related impacts of Assembly Bill 115 (Stats. 2005, Ch. 691).
Taxable Year 2004 - California Conformity to Federal Law
In general, California law conforms to the Internal Revenue Code (IRC) as of January 1, 2001. However, there are continuing differences between California and federal law. It should be noted that California does not always conform to the entire provisions of a public law. California has conformed to some of the changes made to the IRC after January 1, 2001, including some provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (Public Law 107-16), the Victims of Terrorism Tax Relief Act of 2001 (Public Law 107-134), and the Job Creation and Worker Assistance Act of 2002 (Public Law 107-147). In addition, California has now conformed to the Military Family Tax Relief Act of 2003 (Public Law 108-121). California has not conformed to any of the provisions of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Public Law 108-27), the Working Families Tax Relief Act of 2004 (Public Law 108-311) and the American Jobs Creation Act (Public Law 108-357). However, pursuant to Revenue and Taxation Code Section 23801 any federal S corporation is a California S corporation and any shareholder of a federal S corporation is a shareholder of a California S corporation. Thus the expansion of eligibility for S corporation status contained in the American Jobs Creation Act (Public Law 108-357), is applicable under California law. California has not conformed to the new federal Health Savings Accounts contained in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173).