California’s conformity with Federal CARES Act May 2020 Tax News
We are currently analyzing and considering the impact of the Federal CARES Act on California taxpayers. However, we wanted to provide some preliminary information regarding conformity to the CARES Act in response to questions we have received.
California generally conforms to the pension-related items such as early withdrawal penalty, minimum distribution rule changes, etc. However, California does not have automatic conformity to the changes made with regard to loans from a qualified retirement account.
California does not conform to some of the other changes made by the CARES Act, including those related to:
- Loan forgiveness related to the Paycheck Protection program
- NOL Carrybacks
- Charitable contributions
- Student loan forgiveness
- Business interest limitations
- Prior year alternative minimum tax liability (corporations)
- Health-savings accounts changes (California does not conform to health-savings account rules generally speaking)
We will provide additional information to you as we complete our analysis of the CARES Act.