Tax form changes

1. Page 14, Part IV, Line 1, Step 2, Line 2 instructions.

1. We updated the dependent child penalty amount to $475 for the 2025 tax year.

1.
Instructional change.

1. 540NR Booklet, page 53 / Instructions for Sch. CA (540NR) (flat), page 3, General Information, column 2, Federal Tax Reform paragraph, bullet points 5, 7, 9, and 13.
2. 540NR Booklet, page 58 / Instructions for Sch. CA (540NR) (flat), page 8, column 1, paragraph 2 Sexual harassment settlements.
3. 540NR Booklet, page 59 / Instructions for Sch. CA (540NR) (flat), page 9, column 1, e. Income from Federal Form 8853 instructions, paragraph 3 MSA distribution used for menstrual care products.
4. 540NR Booklet, page 59 / Instructions for Sch. CA (540NR) (flat), page 9, column 1, k. Stock Options instructions, paragraph 1 Qualified equity grants.
5. 540NR Booklet, page 61 / Instructions for Sch. CA (540NR) (flat), page 11, column 2, Line 12 Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials instructions, paragraph 2.
6. 540NR Booklet, page 62 / Instructions for Sch. CA (540NR) (flat), page 12, column 2, c. Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 8m instructions, the last two sentences.
7. 540NR Booklet, page 65 / Instructions for Sch. CA (540NR) (flat), page 15, column 2, Line 11 – Gifts By Cash or Check instructions, paragraph 2 College athletic seating rights.

1. General Information, Federal Tax Reform paragraph, bullet points 5, 7, 9, and 13.
2. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 3 – Business Income or (Loss); Sexual harassment settlements paragraph.
3. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; e. Income from Federal Form 8853; MSA distribution used for menstrual care products paragraph.
4. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; k. Stock Options; Qualified equity grants paragraph.
5. Specific Line Instructions; Part II – Income Adjustment Schedule; Section C – Adjustments to Income; Line 11 through Line 25; bullet 2 – Line 12 Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials; paragraph 2.
6. Specific Line Instructions; Part II – Income Adjustment Schedule; Section C – Adjustments to Income; Line 11 through Line 25; Line 24 – Other Adjustments; c. Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 8m; the last two sentences.
7. Specific Line Instructions; Part III – Adjustments to Federal Itemized Deductions; Column B and Column C – Subtractions and Additions; Line 11 – Gifts By Cash Or Check; College athletic seating rights paragraph.

1. We removed existing instructions.
2. We removed existing instructions.
3. We removed existing instructions.
4. We removed existing instructions.
5. We removed existing instructions.
6. We updated existing instructions.
7. We removed existing instructions.

1 – 7.
SB 711, chaptered on October 1, 2025, changed the California Revenue and Taxation Code general specified date of conformity to the Internal Revenue Code from January 1, 2015, to January 1, 2025, for taxable years beginning on or after January 1, 2025. It means California tax laws conform to the changes made to federal tax laws during the ten-year period to the extent California conforms to those laws by reference, except as otherwise provided.

1. 540 Booklet, page 57 / Instructions for Sch. CA (540) (flat), page 3, General Information, column 2, Federal Tax Reform paragraph, bullet points 5, 7, 9, and 13.
2. 540 Booklet, page 61 / Instructions for Sch. CA (540) (flat), page 7, column 1, paragraph 7 Sexual harassment settlements.
3. 540 Booklet, page 62 / Instructions for Sch. CA (540) (flat), page 8, column 2, e. Income from Federal Form 8853 instructions, paragraph 3 MSA distribution used for menstrual care products.
4. 540 Booklet, page 62 / Instructions for Sch. CA (540) (flat), page 8, column 2, k. Stock Options instructions, paragraph 1 Qualified equity grants.
5. 540 Booklet, page 65 / Instructions for Sch. CA (540) (flat), page 11, column 1, Line 12 Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials instructions, paragraph 2.
6. 540 Booklet, page 65 / Instructions for Sch. CA (540) (flat), page 11, column 2, c. Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 8m instructions, the last two sentences.
7. 540 Booklet, page 66 / Instructions for Sch. CA (540) (flat), page 12, column 2, Line 11 – Gifts By Cash or Check instructions, paragraph 2 College athletic seating rights.

1. General Information, Federal Tax Reform paragraph, bullet points 5, 7, 9, and 13.
2. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 3 – Business Income or (Loss); Sexual harassment settlements paragraph.
3. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; e. Income from Federal Form 8853; MSA distribution used for menstrual care products paragraph.
4. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; k. Stock Options; Qualified equity grants paragraph.
5. Specific Line Instructions; Part I – Income Adjustment Schedule; Section C – Adjustments to Income; Line 11 through Line 25; bullet 2 – Line 12 Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials; paragraph 2.
6. Specific Line Instructions; Part I – Income Adjustment Schedule; Section C – Adjustments to Income; Line 11 through Line 25; Line 24 – Other Adjustments; c. Nontaxable amount of the value of Olympic and Paralympic medals and USOC prize money reported on line 8m; the last two sentences.
7. Specific Line Instructions; Part II – Adjustments to Federal Itemized Deductions; Column B and Column C – Subtractions and Additions; Line 11 – Gifts By Cash Or Check; College athletic seating rights paragraph.

1. We removed existing instructions.
2. We removed existing instructions.
3. We removed existing instructions.
4. We removed existing instructions.
5. We removed existing instructions.
6. We updated existing instructions.
7. We removed existing instructions.

1 – 7.
SB 711, chaptered on October 1, 2025, changed the California Revenue and Taxation Code general specified date of conformity to the Internal Revenue Code from January 1, 2015, to January 1, 2025, for taxable years beginning on or after January 1, 2025. It means California tax laws conform to the changes made to federal tax laws during the ten-year period to the extent California conforms to those laws by reference, except as otherwise provided.

1. Page 5, column 3, Part III, Line 1 instruction.

1. Specific Line Instructions, Part III, Line 1 instruction.

1. Removed the second sentence to Part III, Line 1 instruction.

1.
Instructional change.

1. Page 5, column 3, Part III, Line 1 instruction.

1. Specific Line Instructions, Part III, Line 1 instruction.

1. Removed the second sentence to Part III, Line 1 instruction.

1.
Instructional change.

1. Page 2, column 1, line 28 instructions (the paragraph following line 18 instructions).

1. Specific Line Instructions, line 28 instructions (the paragraph following line 18 instructions).

1. We removed existing instructions.

1.
Instructional change.

1. Page 1, column 1, General Information section, after paragraph 1 – Excess Business Loss Limitation.
2. Page 1, column 1, C Definitions, excess business loss paragraph.
3. Page 1, column 2, Specific Line Instructions section, Part I – Total Income/Loss Items, Line 1 instructions.

1. We added new instructions.
2. We modified existing instructions.
3. We modified existing instructions.

1 – 3.
California conforms to the federal clarification or technical amendment to IRC Section 461 which reads “Such excess [business loss carryforward] shall be determined without regard to any deductions, gross income, or gains attributable to any trade or business of performing services as an employee.” Therefore, we are revising the 2024 FTB 3461 instructions for clarity and for additional consistency with federal Form 461 instructions.

1. Page 3, column 1, immediately below the What’s New section title.
2. Page 18, after bullet point 3, columns 1 through 3.

1 – 2.
We added new instructions.

1 – 2.
SB 132, chaptered on June 27, 2025, provides gross income exclusions for any qualified amount received from a settlement entity in connection with a wildfire in California and for any Chiquita Canyon elevated temperature landfill event payment amount received by a taxpayer. If any qualified amount received is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

1. Page 3, column 1, immediately below the What’s New section title.
2. Page 18, after bullet point 1, columns 1 through 3.

1 – 2.
We added new instructions.

1 – 2.
SB 132, chaptered on June 27, 2025, provides a gross income exclusion for any qualified amount received from a settlement entity in connection with a wildfire in California. If any qualified amount received is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

1. 540 2EZ Booklet/Instructions for Form 540 2EZ, page 6, Line 6 – Can you be claimed as a dependent, column 1.
2. 540 2EZ Booklet, page 45, Frequently Asked Questions, column 1, question 1, third to last sentence.

1. Instructions for Form 540 2EZ, Line 6 – Can you be claimed as a dependent.
2. Frequently Asked Questions, question 1, third to last sentence.

1 – 2.
We modified existing instructions.

1 – 2.
California conforms to the federal index figures for earned income on the federal Standard Deduction Worksheet for Dependents. The federal amount changed to $400 in 2022 and remains the same for 2023. From 2013 to 2021 the amount was $350.

1. Page 4, Column 2, under Federal Postponement Periods section.
2. Page 4, Column 2, under Disasters Outside of California Section.
3. Pages 7 through 11, Recent Disaster Loss Relief, President Declared column.
4. Page 11, Recent Disaster Loss Relief, footer section.

1. Federal postponement period, language modified.
2. Disasters outside of California, language modified.
3. Recent disaster loss relief chart, added a foot note.
4. Updated footer section, language updated.

1. Side 1, line 1a.

1. Replaced Sch K (565 or 568) line 13 reference from 13e to 13f.

1. Page 3, column 1, immediately below the What’s New section title.
2. Page 17, after bullet point 5, columns 1 through 3.

1 – 2.
We added new instructions.

1 – 2.
SB 132, chaptered on June 27, 2025, provides a gross income exclusion for any qualified amount received from a settlement entity in connection with a wildfire in California. If any qualified amount received is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

1. 540 2EZ Booklet/Instructions for Form 540 2EZ, page 5, Line 6 – Can you be claimed as a dependent, column 1.
2. 540 2EZ Booklet, page 62, Frequently Asked Questions, column 1, question 1, third to last sentence.

1. Instructions for Form 540 2EZ, Line 6 – Can you be claimed as a dependent.
2. Frequently Asked Questions, question 1, third to last sentence.

1 – 2.
We modified existing instructions.

1 – 2.
California conforms to the federal index figures for earned income on the federal Standard Deduction Worksheet for Dependents. The federal amount changed to $400 in 2022. From 2013 to 2021 the amount was $350.

1. Side 1, Form FTB 3835, Part II Credit Recapture (Individual taxpayers only), title.
2. Side 1, What’s New instructions, Column 1, 2nd paragraph, 1st bullet item.
3. Side 1, Column 2, 1st paragraph, last sentence.
4. Side 1, Column 2, 2nd paragraph, 1st sentence.
5. Side 1, Column 2, 2nd paragraph, 2nd sentence.
6. Page 2, Column 1, C Tax Credit Allocation, 1st sentence.
7. Page 2, Column 2, Specific Line Instructions, Part II, Credit Recapture (Individuals only), title.

1 – 7.
We added, replaced, and deleted instructions.

1 & 7.
Per Revenue and Taxation Code (R&TC) Sections 17053.91 and 23691, Section 50 of the Internal Revenue Code shall apply to this credit which provides a potential recapture of credit for both individuals and corporations.

2 & 3.
These modifications provide clarity that both Personal Income Tax and Corporation Tax taxpayers can claim the State Historic Rehabilitation Credit in the first year the building is placed into service.

4, 5 & 6.
This language was deleted to provide consistency with Office of Historic Preservation policies.

1. Page 7, Column 1, Credit Table, Current Credits, row 17, Code 239, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.
2. Page 7, Column 1, Credit Table, Current Credits, row 19, Code 245, Soundstage Filming, Offset Tax in Section column.

1. Credit Table, Current Credits, row 17, Code 239, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.
2. Credit Table, Current Credits, row 19, Code 245, Soundstage Filming, Offset Tax in Section column.

1. We modified existing instructions.
2. We modified existing instructions.

• For taxable years beginning on or after January 1, 2020, the Program 3.0 California Motion Picture and Television Production Credit.
• For taxable years beginning on or after January 1, 2022, the Soundstage Filming Tax Credit.

1. Page 1, Important Information, column 2, Program 3.0 California Motion Picture and Television Production Credit, Additional credits may be allowed for the following, second paragraph after the bulleted list.
2. Page 3, D Limitation, column 2, first paragraph.

1. Important Information, Program 3.0 California Motion Picture and Television Production Credit, Additional credits may be allowed for the following, second paragraph after the bulleted list.
2. D Limitation, second paragraph.

1. Page 18, column 2, Line 24 through Line 26 – Tax Credits section, fifth paragraph, new bullets #13 and #16.
2. Page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.
3. Page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Soundstage Filming Tax, Offset Tax in Section.

1. Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, fifth paragraph, new bullets #13 and #16.
2. N/A – see Sch. P (100) HTML instructions.
3. N/A – see Sch. P (100) HTML instructions.

1. N/A – see 100 Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.
3. Credit Table, Current Credit Table, Soundstage Filming Tax, Offset Tax in Section column.

1. Added two new bullets to the list of credits.
2. Replaced the credit offset tax in section code.
3. Replaced the credit offset tax in section code.

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.
• For taxable years beginning on or after January 1, 2022 the Soundstage Filming Tax Credit.

1. 100W Booklet, page 19, column 2, Line 24 through Line 26 – Tax Credits section, fourth paragraph, new bullets #13 and #16.
2. 100W Booklet, page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.
3. 100W Booklet, page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Soundstage Filming Tax, Offset Tax in Section.

1. 100W Booklet, Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, fifth paragraph, new bullets #13 and #16.
2. N/A – see Sch. P (100W) HTML instructions.
3. N/A – see Sch. P (100W) HTML instructions.

1. N/A – see 100W Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.
3. Credit Table, Current Credit Table, Soundstage Filming Tax, Offset Tax in Section column.

1. Add two new bullets to the list of credits.
2. Replace the credit offset tax in section code.
3. Replace the credit offset tax in section code.

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.
• For taxable years beginning on or after January 1, 2022 the Soundstage Filming Tax Credit.

1. Page 8, Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.
2. Page 8, Credit Table, Current Credits, row 24, Code 245, Soundstage Filming Tax, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.
2. Credit Table, Current Credits, row 24, Code 245, Soundstage Filming Tax, Column 4 – Offset Tax in Section.

1. We modified existing instructions.
2. We modified existing instructions.

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.
• For taxable years beginning on or after January 1, 2022 the Soundstage Filming Tax Credit.

1. Page 9, Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.
2. Page 9, Credit Table, Current Credits, row 24, Code 245, Soundstage Filming Tax, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.
2. Credit Table, Current Credits, row 24, Code 245, Soundstage Filming Tax, Column 4 – Offset Tax in Section.

1. We modified existing instructions.
2. We modified existing instructions.

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.
• For taxable years beginning on or after January 1, 2022 the Soundstage Filming Tax Credit.

1. Page 3, column 1, immediately below the What’s New section title.
2. Page 3, column 3, paragraph 2, bullet point 1.
3. Page 16, bullet point 5, item #2, columns 1 through 3.
4. Page 16, bullet point 5, item #3, column 1.
5. Page 16, bullet point 5, item #4, column 1.
6. Page 17, after bullet point 6, columns 1 through 3.
7. Page 18, bullet point 1, columns 1 through 3.

1. We added new instructions.
2. We removed existing instructions.
3. We removed existing instructions.
4. We renumbered an existing list.
5. We renumbered an existing list.
6. We added new instructions.
7. We removed existing instructions.

1, 6.
SB 131, chaptered on July 10, 2023, provides gross income exclusion for any qualified amount received in a settlement from Pacific Gas and Electric Company or its subsidiary relating to the 2019 Kincade Fire or the 2020 Zogg Fire. If any qualified amount received in the settlement is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

AB 111, chaptered on May 15, 2023, provides gross income exclusion for any unpaid fees due or owed by a student to a community college that are discharged pursuant to California Education Code Section 32527. If the amount discharged is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

2, 7.
Additionally, AB 111 conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021. Since California conforms, no adjustment is needed on Schedule CA (540 or 540NR).

3.
AB 111 also conforms California tax law to federal American Rescue Plan Act of 2021 that provides gross income exclusion of certain student loans discharged after December 31, 2020, and before January 1, 2026. Since California conforms, no adjustment is needed on Schedule CA (540 or 540NR).

4, 5.
We renumbered an existing list since we removed an item from the list.

1. 540NR Booklet, page 4, What’s New and Other Important Information for 2022, column 1, immediately below the 2022 Tax Law Changes/What’s New section title.
2. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, column 1, immediately below the What’s New section title.
3. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, column 2, Federal Consolidated Appropriations Act (CAA), 2021 paragraph, bullet point 1.
4. 540NR Booklet, page 47 / Instructions for Sch. CA (540NR) (flat), page 7, column 1, Line 8 – Other Income, c. Cancellation of Debt instructions, Certain student loan forgiveness paragraph.
5. 540NR Booklet, page 47 / Instructions for Sch. CA (540NR) (flat), page 7, column 2, Line 8 – Other Income, z. Other Income instructions, after the first paragraph
6. 540NR Booklet, page 48 / Instructions for Sch. CA (540NR) (flat), page 8, column 1, Line 8 – Other Income, z. Other Income instructions, Emergency financial aid grants paragraph.

1. What’s New and Other Important Information for 2022, 2022 Tax Law Changes/What’s New, immediately below section title.
2. N/A – see Sch. CA (540NR) HTML instructions.
3. N/A – see Sch. CA (540NR) HTML instructions.
4. N/A – see Sch. CA (540NR) HTML instructions.
5. N/A – see Sch. CA (540NR) HTML instructions.
6. N/A – see Sch. CA (540NR) HTML instructions.

1. N/A – see 540NR Booklet HTML instructions.
2. What’s New, immediately below section title.
3. General Information, Federal Consolidated Appropriations Act (CAA), 2021 paragraph, bullet point 1.
4. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; c. Cancellation of Debt; Certain student loan forgiveness paragraph.
5. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other Income; after the first paragraph.
6. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other Income; Emergency financial aid grants paragraph.

1. We added new instructions.
2. We added new instructions.
3. We removed existing instructions.
4. We removed existing instructions.
5. We added new instructions.
6. We removed existing instructions.

1, 2, 5.
AB 111, chaptered on May 15, 2023, provides gross income exclusion for any unpaid fees due or owed by a student to a community college that are discharged pursuant to California Education Code Section 32527. If the amount discharged is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540NR) for California tax purposes.

3, 6.
Additionally, AB 111 conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021. Since California conforms, no adjustment is needed on Schedule CA (540NR).

4.
AB 111 also conforms California tax law to federal American Rescue Plan Act of 2021 that provides gross income exclusion of certain student loans discharged after December 31, 2020, and before January 1, 2026. Since California conforms, no adjustment is needed on Schedule CA (540NR).

1. 540 Booklet, page 4, What’s New and Other Important Information for 2022, column 1, immediately below the 2022 Tax Law Changes/What’s New section title.
2. 540 Booklet, page 45 / Instructions for Sch. CA (540) (flat), page 1, column 1, immediately below the What’s New section title.
3. 540 Booklet, page 45 / Instructions for Sch. CA (540) (flat), page 1, column 2, Federal Consolidated Appropriations Act (CAA), 2021 paragraph, bullet point 1.
4. 540 Booklet, page 51 / Instructions for Sch. CA (540) (flat), page 7, column 1, Line 8 – Other Income, c. Cancellation of Debt instructions, Certain student loan forgiveness paragraph.
5. 540 Booklet, page 52 / Instructions for Sch. CA (540) (flat), page 8, column 1, Line 8 – Other Income, z. Other Income instructions, after the first paragraph.
6. 540 Booklet, page 52 / Instructions for Sch. CA (540) (flat), page 8, column 1, Line 8 – Other Income, z. Other Income instructions, Emergency financial aid grants paragraph.

1. What’s New and Other Important Information for 2022, 2022 Tax Law Changes/What’s New, immediately below section title.
2. N/A – see Sch. CA (540) HTML instructions.
3. N/A – see Sch. CA (540) HTML instructions.
4. N/A – see Sch. CA (540) HTML instructions.
5. N/A – see Sch. CA (540) HTML instructions.
6. N/A – see Sch. CA (540) HTML instructions.

1. N/A – see 540 Booklet HTML instructions.
2. What’s New, immediately below section title.
3. General Information, Federal Consolidated Appropriations Act (CAA), 2021 paragraph, bullet point 1.
4. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; c. Cancellation of Debt; Certain student loan forgiveness paragraph.
5. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other Income; after the first paragraph.
6. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other Income; Emergency financial aid grants paragraph.

1. We added new instructions.
2. We added new instructions.
3. We removed existing instructions.
4. We removed existing instructions.
5. We added new instructions.
6. We removed existing instructions.

1, 2, 5.
AB 111, chaptered on May 15, 2023, provides gross income exclusion for any unpaid fees due or owed by a student to a community college that are discharged pursuant to California Education Code Section 32527. If the amount discharged is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540) for California tax purposes.

3, 6.
Additionally, AB 111 conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021. Since California conforms, no adjustment is needed on Schedule CA (540).

4.
AB 111 also conforms California tax law to federal American Rescue Plan Act of 2021 that provides gross income exclusion of certain student loans discharged after December 31, 2020, and before January 1, 2026. Since California conforms, no adjustment is needed on Schedule CA (540).

1. Page 4, Specific Line Instructions, Part I – Additional Tax on Early Distributions, column 2, Line 2 – Early Distributions Not Subject to Additional Tax, Exceptions number list.

1. Line 2 – Early Distributions Not Subject to Additional Tax, Exceptions number list.

1. We modified existing instructions.

1. The federal Consolidated Appropriations Act, 2023 (PL 117-328) was enacted on December 29, 2022 and contains the Setting Every Community Up for Retirement Enhancement or SECURE 2.0 Act of 2022. The 2022 Instructions for form FTB 3805P are being revised based on applicable changes on the 2022 federal Instructions for Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts dated March 6, 2023 per effective provisions under the SECURE 2.0 Act.

1. Instructions, Page 1, Column 2, When and Where to File section, Payment 2 paragraph.

1. Added language.

1. Added language to clarify on how to make PTE elective tax payments.

1. 540 Booklet, page 69 / 540 2EZ Booklet, page 45 / 540NR Booklet, page 71 / FTB 3514 form (flat), side 3, line 23b.
2. 540 Booklet, page 76 / 540 2EZ Booklet, page 52 / 540NR Booklet, page 78 / FTB 3514 instructions (flat), page 6, column 2, paragraph 1, item a.
3. 540 Booklet, pages 76-77 / 540 2EZ Booklet, pages 52-53 / 540NR Booklet, pages 78-79 / FTB 3514 instructions (flat), pages 6-7, column 2, Line 23 paragraphs.

1. N/A
2. Specific Line Instructions; Step 8 Qualifications for Young Child Tax Credit (YCTC); bullet point #3, item a.
3. Specific Line Instructions: Step 8 Qualifications for Young Child Tax Credit (YCTC); Line 23 – Total federal net loss paragraphs.

1. We modified existing form instructions.
2. We modified existing instructions.
3. We modified existing instructions.

1-3.
SB 201, chaptered on June 30, 2022, expanded the Young Child Tax Credit (YCTC) eligibility. One of the new eligibility requirements is that specified individuals must not have net losses in excess of $32,490 in the taxable year. We are revising the form and instructions to specify how 540 and 540NR taxpayers can compute their net loss amount for the purpose of claiming the YCTC.

1. Voucher, Payment 1 description.
2. Instructions, Page 1, Column 1, paragraph 3.
3. Instructions, Page 1, Column 2, When and Where to File section, Payment 1 paragraph.
4. Instructions, Page 1, Column 2, When and Where to File section, Note paragraph.
5. Instructions, Page 1, Year on footnote.

1. Language modified.
2. Language modified.
3. Language modified.
4. Language modified.
5. Year modified.

1-4.
Senate Bill 851 – Personal Income Tax Law: Small Business Relief Act: elective tax being signed into law on September 28, 2022.

5.
Update to reflect correct year of annual change of form.

1. Page 1, Column 2, Amount of Payment section, Payment table, Payment 1, Amount box.

1. Language modified.

1. To clarify the amount of payment language for elective tax payment.

1. Page 1, Column 1, Electronic Payment section, First Paragraph.

1. Electronic Payment section, First Paragraph added.

1. To add electronic payment language for S corporations.

1. Page 1, Column 1, General Information, Second and Third paragraphs, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
2. Page 1, Column 2, Instructions, Fifth paragraph, Amount of Payment.

1. General Information, Second and Third paragraphs updated.
2. Instructions, Fifth paragraph updated.

1. SB 113, chaptered on February 9, 2022, expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026.

1. Page 3, column 1, immediately below the What’s New section title.
2. Page 17, after bullet point 3, columns 1 through 3.

1 – 2.
We added new instructions.

1 – 2.
SB 132, chaptered on June 27, 2025, provides a gross income exclusion for any qualified amount received from a settlement entity in connection with a wildfire in California. If any qualified amount received is included in income for federal tax purposes, an adjustment is needed on Schedule CA (540 or 540NR) for California tax purposes.

1. Page 1, Column 2, Important Information, Program 3.0 California Motion Picture and Television Production Credit, 2nd paragraph after the bulleted list.
2. Page 3, Column 1, D Limitations, 4th paragraph.

1. Important Information, Program 3.0 California Motion Picture and Television Production Credit, 2nd paragraph after the bulleted list.
2. D Limitation, 4th paragraph.

1 - 2:
We added and deleted instructions.

1 - 2:
Senate Bill 132 chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0, California Motion Picture and Television Production credit to reduce regular tax below the tentative minimum tax.

1. Page 7, Column 2, Credit Table, Current Credits, row 4, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4, Offset Tax in Section.

1. Credit Table, Current Credits, row 17, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4, Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. Page 8, Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. Page 9, Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 22, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. 100 Booklet, page 18, column 2, Line 24 through Line 26 – Tax Credits section, sixth paragraph, new bullets #13.
2. 100 Booklet, page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.

1. 100 Booklet, Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. N/A – see Sch. P (100) HTML instructions.

1. N/A – see 100 Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.

1. Add one new bullet to the list of credits.
2. Replace the credit offset tax in section code.

SB 132, chaptered on July 10, 2023, allows the following credit to reduce tax below tentative minimum tax:

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.

1. 100W Booklet, page 19, column 1, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. 100W Booklet, page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.

1. 100W Booklet, Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. N/A – see Sch. P (100W) HTML instructions.

1. N/A – see 100W Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.

1. Add a new bullet to the list of credits.
2. Replace the credit offset tax in section code.

SB 132, chaptered on July 10, 2023, allows the following credit to reduce tax below tentative minimum tax:

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.

1. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, column 1, paragraph 6, bullet point 2.
2. 540NR Booklet, page 47 / Instructions for Sch. CA (540NR) (flat), page 7, column 2, z Other income instructions, Emergency financial aid grants paragraph.

1. What’s New section, paragraph 6, bullet point 2.
2. Specific Line Instructions; Part II – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other income; Emergency financial aid grants paragraph.

1. We removed existing instructions.
2. We removed existing instructions.

1-2.
AB 111, chaptered on May 15, 2023, conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021.

1. Page 3, column 3, bullet point 1.
2. Page 17, bullet point 4, columns 1 through 3.

1. We removed existing instructions.
2. We removed existing instructions.

1-2.
AB 111, chaptered on May 15, 2023, conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021.

1. 540 Booklet, page 43 / Instructions for Sch. CA (540) (flat), page 1, column 1, paragraph 6, bullet point 2.
2. 540 Booklet, page 49 / Instructions for Sch. CA (540) (flat), page 7, column 2, z Other income instructions, Emergency financial aid grants paragraph.

1. What’s New section, paragraph 6, bullet point 2.
2. Specific Line Instructions; Part I – Income Adjustment Schedule; Section B – Additional Income; Line 8 – Other Income; z. Other income; Emergency financial aid grants paragraph.

1. We removed existing instructions.
2. We removed existing instructions.

1-2.
AB 111, chaptered on May 15, 2023, conforms California tax law to federal gross income exclusion of certain emergency financial aid grants received by a student in postsecondary education pursuant to, or described in, (1) Section 3504 or 18004 of the Coronavirus Aid, Relief, and Economic Security Act; (2) Section 314 of Division M or Section 277 of Division N of the Consolidated Appropriations Act, 2021; or (3) Section 2003 of the American Rescue Plan Act of 2021.

1. Page 4, Specific Line Instructions, Part I – Additional Tax on Early Distributions, column 2, Line 2 – Early Distributions Not Subject to Additional Tax, Exception No. 12, Other Exceptions, Qualified disaster distributions.

1. Line 2 – Early Distributions Not Subject to Additional Tax, Exception No. 12, Other Exceptions, Qualified disaster distributions.

1. We modified existing instructions.

The federal Consolidated Appropriations Act, 2023 (PL 117-328) was enacted on December 29, 2022 and contains the Setting Every Community Up for Retirement Enhancement or SECURE 2.0 Act of 2022. The 2021 Instructions for form FTB 3805P are being revised based on amendments made under section 331 of the SECURE 2.0 Act.

1. Page 21, bullet point # 7, columns 1 through 3.
2. Page 24, item # 3, column 3, last bullet point.

1. We removed existing instructions.
2. We removed existing instructions.

1 – 2.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540 or 540NR).

1. 540NR Booklet, page 37 / Sch. CA (540NR) form (flat), side 3, line 24k, columns B, D, and E.
2. 540NR Booklet, page 49 / Instructions for Sch. CA (540NR) (flat), page 9, column 2, paragraph 6, line 24k instructions, k. Excess deductions of IRC Section 67(e) expenses from federal Schedule K-1 (Form 1041).
3. 540NR Booklet, page 53 / Instructions for Sch. CA (540NR) (flat), page 13, column 1, Line 21 – Other Expenses paragraphs, last bullet point.

1. N/A
2. Specific Line Instructions; Part II – Income Adjustment Schedule; Section C – Adjustments to Income; Line 24 – Other Adjustments; k. Excess deductions of IRC Section 67(e) expenses from federal Schedule K-1 (Form 1041).
3. Specific Line Instructions; Part III – Adjustments to Federal Itemized Deductions; Line 21 – Other Expenses; last bullet point before Claim of Right paragraph.

1. We removed a keying symbol and shaded an existing column. We also unshaded existing columns and added keying symbols.
2. We removed existing instructions.
3. We removed existing instructions.

1 – 3.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540 and 540NR).

1. 540 Booklet, page 39 / Sch. CA (540) form (flat), side 3, line 24k, column B.
2. 540 Booklet, page 52 / Instructions for Sch. CA (540) (flat), page 10, column 1, paragraph 5, line 24k instructions, k. Excess deductions of IRC Section 67(e) expenses from federal Schedule K-1 (Form 1041).
3. 540 Booklet, page 53 / Instructions for Sch. CA (540) (flat), page 11, column 2, Line 21 – Other Expenses paragraphs, last bullet point.

1. N/A
2. Specific Line Instructions; Part I – Income Adjustment Schedule; Section C – Adjustments to Income; Line 24 – Other Adjustments; k. Excess deductions of IRC Section 67(e) expenses from federal Schedule K-1 (Form 1041).
3. Specific Line Instructions; Part II – Adjustments to Federal Itemized Deductions; Line 21 – Other Expenses; last bullet point before Claim of Right paragraph.

1. We removed a keying symbol and shaded an existing column.
2. We removed existing instructions.
3. We removed existing instructions.

1 – 3.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540 and 540NR).

1. Page 3, What’s New section, column 1, immediately below “What’s New”.
2. Page 17, Other Income/Loss, after bullet point #7 – Emergency financial aid grants, columns 1 through 3.

1. We added new instructions.
2. We added new instructions.

1 – 2.

The following bills were chaptered on September 29, 2022, and they provide an exclusion from gross income for California purposes as follows:

AB 152, for taxable years beginning on or after January 1, 2021, and before January 1, 2030, provides an exclusion from gross income grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program.

AB 1249, for taxable years beginning before January 1, 2028, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement from the Fire Victims Trust.

SB 1246, for taxable years beginning before January 1, 2027, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement for claims associated with the 2017 Thomas Fire and the 2018 Woolsey Fire.

Since federal law has no similar exclusion for those provisions above, an adjustment is needed on Schedule CA (540 or 540NR) for each one of those items.

1. Page 1, Column 2, What’s New, Main Street Small Business Tax Credit II, first paragraph after bulleted list.
2. Page 2, Column 2, Specific Line Instructions, Part II – Carryover, first paragraph.

1. No HTML instructions.

1. Page 1, Column 2, What’s New, Main Street Small Business Tax Credit II, first paragraph after bulleted list, first sentence deleted.
2. Page 2, Column 2, Specific Line Instructions, Part II – Carryover, first paragraph, text deleted.

1. Page 3, What’s New, column 1, paragraph 1, Reporting Requirements.
2. Page 3, What’s New, column 2, paragraph 4, Paycheck Protection Program (PPP) Loans Forgiveness.
3. Page 12, Business Income or (Loss) – Adjustments to Basis or Business Deductions, bullet point 1, Paycheck protection program and Other loan forgiveness, row 2, column 2 and column 3.

1. We modified existing instructions.
2. We modified existing instructions.
3. We removed existing instructions.

1 – 3.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 3, Column 1, What’s New, Reporting Requirements paragraph.
2. Page 3, Column 2, What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.

1. Under “What’s New” ("Reporting Requirements " paragraph).
2. Under “What’s New” (“Paycheck Protection Program (PPP) Loans Forgiveness” paragraph).

1. Page 3, Column 1, What’s New, Reporting Requirements, first paragraph revised.
2. Page 3, Column 2, What’s New, Paycheck Protection Paragraph (PPP) Loans Forgiveness, first paragraph revised.

1. Assembly Bill 194, which chaptered on June 30, 2022, requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion from the PPP Extension Act of 2021. As a result, we have updated the existing language under What’s New.
2. Assembly Bill 194, which chaptered on June 30, 2022, modified Revenue and Taxation Code Sections 17131.8 and 24308.6 to exclude from gross income any covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021. As a result, California now conforms to the federal extension period covered after March 31, 2021, to June 30, 2021.

1. Page 2, Column 3, What’s New, Paycheck Protection Paragraph (PPP) Loans Forgiveness, first paragraph.
2. Page 2, Column 3, What’s New, Reporting Requirements, first paragraph.

1. Under “What’s New” (“Paycheck Protection Paragraph (PPP) Loans Forgiveness” paragraph).
2. Under “What’s New” (“Reporting Requirements” paragraph).

1. Page 2, Column 3, What’s New, Paycheck Protection Paragraph (PPP) Loans Forgiveness, first paragraph revised.
2. Page 2, Column 3, What’s New, Reporting Requirements, first paragraph revised.

1. Assembly Bill 194, which chaptered on June 30, 2022, modified Revenue and Taxation Code Section 24308.6 to exclude from gross income any covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021. As a result, California now conforms to the federal extension period covered after March 31, 2021, to June 30, 2021.
2. Assembly Bill 194, which chaptered on June 30, 2022, requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion from the PPP Extension Act of 2021. As a result, we have updated the existing language under What’s New.

1. 540NR Booklet, page 4, 2021 Tax Law Changes/What’s New, column 2, paragraph 6, Paycheck Protection Program (PPP) Loans Forgiveness.
2. 540NR Booklet, page 5, 2021 Tax Law Changes/What’s New, column 1, paragraph 5, Reporting Requirements.
3. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, What’s New, column 1, paragraph 1, Reporting Requirements.
4. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, What’s New, column 2, paragraph 5, Paycheck Protection Program (PPP) Loans Forgiveness.
5. 540NR Booklet, page 45 / Instructions for Sch. CA (540NR) (flat), page 5, line 3, Business Income or (Loss), column 2, Paycheck Protection Program loans forgiveness instructions, paragraph 2.

1. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 11, Paycheck Protection Program (PPP) Loans Forgiveness.
2. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 18, Reporting Requirements.

3. What’s New, paragraph 1, Reporting Requirements.
4. What’s New, paragraph 13, Paycheck Protection Program (PPP) Loans Forgiveness.
5. Specific Line Instructions, Part II – Income Adjustment Schedule; Section B – Additional Income, Line 3 – Business Income or (Loss), Paycheck Protection Program loans forgiveness instructions, paragraph 2.

1. We modified existing instructions.
2. We modified existing instructions.
3. We modified existing instructions.
4. We modified existing instructions.
5. We removed existing instructions.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 1, What’s New, column 1, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
2. Page 1, What’s New, column 1, Reporting Requirements paragraph.

1. No HTML instructions.

We modified existing instructions.

AB 194, chaptered on June 30, 2022, conforms to federal law by excluding from gross income any covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of the Franchise Tax Board’s reporting requirements, taxpayers who benefited from the exclusion from gross income for covered loan amounts should file form FTB 4197, Information on Tax Expenditure Items.

1. 540 Booklet, page 5, 2021 Tax Law Changes/What’s New, column 1, paragraph 2, Paycheck Protection Program (PPP) Loans Forgiveness.
2. 540 Booklet, page 5, 2021 Tax Law Changes/What’s New, column 1, paragraph 9, Reporting Requirements.
3. 540 Booklet, page 43 / Instructions for Sch. CA (540) (flat), page 1, What’s New, column 1, paragraph 1, Reporting Requirements.
4. 540 Booklet, page 43 / Instructions for Sch. CA (540) (flat), page 1, What’s New, column 2, paragraph 6, Paycheck Protection Program (PPP) Loans Forgiveness.
5. 540 Booklet, page 47 / Instructions for Sch. CA (540) (flat), page 5, line 3, Business Income or (Loss), column 2, Paycheck Protection Program loans forgiveness instructions, paragraph 2.

1. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 11, Paycheck Protection Program (PPP) Loans Forgiveness
2. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 18, Reporting Requirements.

3. What’s New, paragraph 1, Reporting Requirements.
4. What’s New, paragraph 13, Paycheck Protection Program (PPP) Loans Forgiveness.
5. Specific Line Instructions, Part I – Income Adjustment Schedule; Section B – Additional Income, Line 3 – Business Income or (Loss), Paycheck Protection Program loans forgiveness instructions, paragraph 2.

1. We modified existing instructions.
2. We modified existing instructions.
3. We modified existing instructions.
4. We modified existing instructions.
5. We removed existing instructions.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Form, Side 1, Part III, line 15.
2. Instructions, Page 2, column 1, Part III – Limitation on Losses, line 14b instructions.
3. Instructions, Page 2, column 1, Part III – Limitation on Losses, after line 14c instructions.

1. No HTML instructions.

1. We added new instructions.
2. We added new instructions.
3. We added new instructions.

For clarification.

We are adding instructions to clarify that in some cases taxpayers are able to utilize the excess business loss carryover from the prior year and report it on Schedule CA.

1. Page 3, Column 2, What’s New, Reporting Requirements paragraph.
2. Page 3, Column 2, What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
3. Page 18, Column 2, Schedule K (568) and Schedule K-1 (568) – Member’s Share of Income, Deductions, Credits, etc., Paycheck Protection Program Loans Forgiveness second paragraph.

1. What’s New, Reporting Requirements paragraph.
2. What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
3. Schedule K (568) and Schedule K-1 (568) – Member’s Share of Income, Deductions, Credits, etc.; Paycheck Protection Program Loans Forgiveness second paragraph.

1. What’s New, Reporting Requirements paragraph modified.
2. What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph modified.
3. Schedule K (568) and Schedule K-1 (568) – Member’s Share of Income, Deductions, Credits, etc.; Paycheck Protection Program Loans Forgiveness second paragraph deleted.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 3, Column 2, What’s New, Reporting Requirements paragraph.
2. Page 4, Column 1, What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
3. Page 16, Column 1, Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., Paycheck Protection Program Loans Forgiveness second paragraph.

1. What’s New, Reporting Requirements paragraph.
2. What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
3. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.; Paycheck Protection Program Loans Forgiveness second paragraph.

1. What’s New, Reporting Requirements paragraph modified.
2. What’s New, Paycheck Protection Program (PPP) Loans Forgiveness paragraph modified.
3. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.; Paycheck Protection Program Loans Forgiveness second paragraph deleted.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 3, Column 3, What’s New/Tax Law Changes, Reporting Requirements paragraph revised.
2. Page 4, Column 1, What’s New/Tax Law Changes, Paycheck Protection Program (PPP) Loans Forgiveness, first paragraph revised.
3. Page 17, Column 2, Line 8 – Other additions, Paycheck Protection Program Loans Forgiveness, second paragraph deleted

1. What’s New/Tax Law Changes, seventh paragraph, Reporting Requirements.
2. What’s New/Tax Law Changes, twelfth paragraph, Paycheck Protection Program (PPP) Loans Forgiveness.
3. Specific Line Instructions, Line 1 through Line 41, Line 8, Other Additions, Paycheck Protection Program Loans Forgiveness, second paragraph

1. Page 3, Column 3, What’s New/Tax Law Changes, Reporting Requirements paragraph revised.
2. Page 4, Column 1, What’s New/Tax Law Changes, Paycheck Protection Program (PPP) Loans Forgiveness, first paragraph revised.
3. Page 17, Column 2, Line 8 – Other additions, Paycheck Protection Program Loans Forgiveness, second paragraph deleted.

Assembly Bill 194, which chaptered on June 30, 2022 requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion from the PPP Extension Act of 2021. As a result we have updated the existing language under What’s New.

AB 194 also modified Revenue and Taxation Code Section 24308.6 to exclude from gross income any covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021. As a result, California now conforms to the federal extension period covered after March 31, 2021, to June 30, 2021.

1. Page 3, Column 3, What’s New/Tax Law Changes, Fourth Paragraph, Reporting Requirements.
2. Page 4, Column 1, What’s New/Tax Law Changes, Fourth Paragraph, Paycheck Protection Program (PPP) Loans Forgiveness.
3. Page 18, Specific Line Instructions, Line 1 through Line 44, Line 7 – Other Additions, Seventh Paragraph.
4. Page 23, Column 2, Schedule K and Schedule K-1 (100S), Sixth Paragraph.

1. What’s New/Tax Law Changes, Tenth Paragraph, Reporting Requirements.
2. What’s New/Tax Law Changes, Fifteenth Paragraph, Paycheck Protection Program (PPP) Loans Forgiveness.
3. Specific Line Instructions, Line 1 through Line 44, Line 7, Seventh Paragraph.
4. Schedule K and Schedule K-1 (100S), Seventh Paragraph.

1. What’s New/Tax Law Changes, paragraph updated.
2. What’s New/Tax Law Changes, paragraph updated.
3. Specific Line Instructions, Line 7, Seventh Paragraph deleted.
4. Schedules, Schedule K and Schedule K-1 (100S), Seventh Paragraph deleted.

Assembly Bill 194, which chaptered on June 30, 2022 requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion from the PPP Extension Act of 2021. As a result we have updated the existing language under What’s New.

AB 194 also modified Revenue and Taxation Code Section 24308.6 to exclude from gross income any covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021. As a result, California now conforms to the federal extension period covered after March 31, 2021, to June 30, 2021.

1. Page 3, Column 2, What’s New/Tax Law Changes, Reporting Requirements paragraph.
2. Page 3, Column 3 and Page 4, Column 1, What’s New/Tax Law Changes, Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
3. Page 16, Column 3, Line 8 – Other additions, Paycheck Protection Program Loans Forgiveness paragraph.

1. What’s New/Tax Law Changes, Tenth Paragraph, Reporting Requirements.
2. What’s New/Tax Law Changes, Fifteenth Paragraph, Paycheck Protection Program (PPP) Loans Forgiveness.
3. Specific Line Instructions, Line 1 through Line 41, Line 8, Other Additions, Paycheck Protection Program Loans Forgiveness, second paragraph.

1. Page 3, Column 2, What’s New/Tax Law Changes, Reporting Requirements paragraph revised.
2. Page 3, Column 3 and Page 4, Column 1, What’s New/Tax Law Changes, Paycheck Protection Program (PPP) Loans Forgiveness, first paragraph revised.
3. Page 16, Column 3, Line 8 – Other additions, Paycheck Protection Program Loans Forgiveness, second paragraph deleted.

Assembly Bill 194, which chaptered on June 30, 2022 requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion from the PPP Extension Act of 2021. As a result we have updated the existing language under What’s New.

Assembly Bill 194, which chaptered on June 30, 2022, modified Revenue and Taxation Code Section 24308.6 to exclude from gross income any covered loan amounts forgiven pursuant to the Paycheck Protection Program Extension Act of 2021. As a result, California now conforms to the federal extension period covered after March 31, 2021, to June 30, 2021.

1. Page 3, Column 1, What’s New, Reporting Requirements paragraph.

1. What's New, Reporting Requirements paragraph.

1. What's New, Reporting Requirements paragraph updated.

AB 194, chaptered on June 30, 2022, conforms state tax law to the federal tax treatment for covered loan amounts forgiven pursuant to the PPP Extension Act of 2021.

As part of FTB’s reporting requirements, taxpayers who benefited from the PPP loans forgiveness should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 5, Column 1, When to Claim Your Disaster Loss, Individual Tax Returns table.
2. Page 5, Column 2, When to Claim Your Disaster Loss, Corporation Tax Returns table.

1. Language modified.
2. Language modified.

1. To clarify the due date if disaster loss was claimed on prior year tax returns.

1. Instructions, Page 2, column 1, Sales and Use Taxes Section, 2nd paragraph.

1. Under Important Information, last paragraph and above General Information.

1. FTB 3541 instructions, Page 2, Column 1, last paragraph under Important Information being updated to include the $5,000,000 cap only applies to years 2020 and 2021 plus allowing taxpayers to elect to obtain a refund for California Motion Picture and Television Production Credit.

1. Senate Bill 113, chaptered on February 9, 2022, makes a variety of changes one of which provides that the $5,000,000 cap applies only to the years 2020 and 2021. This bill also allows taxpayers who make the irrevocable election with CDTFA to apply their movie credit against qualified sales and use taxes, to elect to obtain a refund for amounts that exceeds $5,000,000 subject to certain limitations, during the reporting period that occur during the 2021 calendar year.

1. Page 3, Column 1, What’s New, Reporting Requirements paragraph.

1. What's New, Reporting Requirements paragraph.

1. What's New, Reporting Requirements paragraph updated.

1. SB 113 requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

1. Page 3, Column 1, What’s New, Restaurant Revitalization Grants paragraph.
2. Page 3, Column 1, What’s New, Shuttered Venue Operator Grants paragraph.
3. Page 3, Column 2, What's New, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
4. Page 3, Column 2, What’s New, Reporting Requirements paragraph.
5. Page 6, Column 1, Federal/State Differences, second paragraph.
6. Page 16, Column 1, Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
7. Page 18, Column 2, Income, Restaurant Revitalization Grants paragraph.
8. Page 18, Column 2, Income, Shuttered Venue Operator Grants paragraph.

1. What’s New, Restaurant Revitalization Grants paragraph.
2. What’s New, Shuttered Venue Grants paragraph.
3. What's New, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
4. What's New, Reporting Requirements paragraph.
5. Federal/State Differences, Second Paragraph.
6. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
7. Schedule K (565) and Schedule K-1 (565) Specific Line Instructions, Income, Restaurant Revitalization Grants paragraph.
8. Schedule K (565) and Schedule K-1 (565) Specific Line Instructions, Income, Shuttered Venue Grants paragraph.

1. What’s New, Restaurant Revitalization Grants paragraph deleted.
2. What’s New, Shuttered Venue Operator Grants paragraph replaced.
3. What's New, Elective Tax for Pass-Through Entities (PTE) and Credits for Owners paragraph updated.
4. What's New, Reporting Requirements paragraph updated.
5. Federal/State Differences, Second Paragraph deleted.
6. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.; Shuttered Venue Operator Grants paragraph added.
7. Schedule K (565) and Schedule K-1 (565) Specific Line Instructions, Income, Restaurant Revitalization Grants paragraph deleted.
8. Schedule K (565) and Schedule K-1 (565) Specific Line Instructions, Income, Shuttered Venue Operator Grants paragraph deleted.

1, 7.
SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

2, 6, 8.
In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New and Specific Instructions.

3.
SB 113 expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026. As the result, we have updated the existing language under What’s New.

4.
SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

5.
To remove duplicate language.

1. Page 3, Column 1, What’s New, Restaurant Revitalization Grants paragraph.
2. Page 3, Column 1, What’s New, Shuttered Venue Operator Grants paragraph.
3. Page 3, Column 1, What's New, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
4. Page 3, Column 1, What’s New, Reporting Requirements paragraph.
5. Page 5, Column 1, Federal/State Differences, second paragraph.
6. Page 18, Column 2, Schedule K (568) and Schedule K 1 (568) – Member’s Share of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
7. Page 20, Column 2, Specific Line Instructions, Restaurant Revitalization Grants paragraph.
8. Page 20, Column 2, Specific Line Instructions, Shuttered Venue Operator Grants paragraph.

1. What’s New, Restaurant Revitalization Grants.
2. What’s New, Shuttered Venue Grants.
3. What's New, Elective Tax for Pass-through Entities (PTE) and Credit for Owners.
4. What's New, Reporting Requirements paragraph.
5. Federal/State Differences, Second Paragraph.
6. Schedule K (568) and Schedule K 1 (568) – Member’s Share of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
7. Schedule K (568) and Schedule K-1 (568) Specific Line Instructions, Income, Restaurant Revitalization Grants paragraph.
8. Schedule K (568) and Schedule K-1 (568) Specific Line Instructions, Income, Shuttered Venue Grants paragraph.

1. What’s New, Restaurant Revitalization Grants paragraph deleted.
2. What’s New, Shuttered Venue Operator Grants paragraph replaced.
3. What's New, Elective Tax for Pass-Through Entities (PTE) and Credits for Owners paragraph updated.
4. What's New, Reporting Requirements paragraph updated.
5. Federal/State Differences, Second Paragraph deleted.
6. Schedule K (568) and Schedule K 1 (568) – Member’s Share of Income, Deductions, Credits, etc.; Shuttered Venue Operator Grants paragraph added.
7. Schedule K (568) and Schedule K-1 (568) Specific Line Instructions, Income, Restaurant Revitalization Grants paragraph deleted.
8. Schedule K (568) and Schedule K-1 (568) Specific Line Instructions, Income, Shuttered Venue Operator Grants paragraph deleted.

1, 7.
SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

2, 6, 8.
In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New and Specific Instructions.

3.
SB 113 expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026. As the result, we have updated the existing language under What’s New.

4.
SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

5.
To remove duplicate language.

1. Page 3, Column 2, What’s New/Tax Law Changes, Second Paragraph, Restaurant Revitalization Grants.
2. Page 3, Column 2, What’s New/Tax Law Changes, Fourth Paragraph, Shuttered Venue Operator Grants.
3. Page 3, Column 3, What’s New/Tax Law Changes, Eighth Paragraph, Reporting Requirements.
4. Page 17, Column 2, Line 8, Other Additions, Third Paragraph, Restaurant Revitalization Grants.
5. Page 17, Column 2, Line 8, Other Additions, Fourth Paragraph, Shuttered Venue Operator Grants.

1. What’s New/Tax Law Changes, Second Paragraph, Restaurant Revitalization Grants.
2. What’s New/Tax Law Changes, Fourth Paragraph, Shuttered Venue Grants.
3. What’s New/Tax Law Changes, Eighth Paragraph, Reporting Requirements.
4. Specific Line Instructions, Line 1 through Line 41, Line 8, Other Additions, Third Paragraph, Restaurant Revitalization Grants.
5. Specific Line Instructions, Line 1 through Line 41, Line 8, Other Additions, Fourth Paragraph, Shuttered Venue Grants.

1. Page 3, Column 2, What’s New/Tax Law Changes, Second Paragraph deleted.
2. Page 3, Column 2, What’s New/Tax Law Changes, Fourth Paragraph replaced.
3. Page 3, Column 3, What’s New/Tax Law Changes, Eighth Paragraph verbiage added.
4. Page 17, Column 2, Line 8, Other Additions, Third Paragraph, deleted.
5. Page 17, Column 2, Line 8, Other Additions, Fourth Paragraph replaced.

SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100, line 8 – Other Additions. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New and Specific Line Instructions.

SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

1. Page 1, What’s New, column 1, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
2. Page 9, Credit Table, Current Credits, row 19, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. Under What’s New, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
2. Credit Table, Current Credits, row 19, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. We modified existing instructions.
2. We modified existing instructions.

SB 113, chaptered on February 9, 2022, expands the Pass-Through Entity (PTE) elective tax benefits by:

• Repealing the tentative minimum tax (TMT) limitation on the PTE elective tax credit;
• Allowing partnerships/S corporations/LLCs with owners that are partnerships to make the election (although the tax can’t be paid on behalf of the partnership owner);
• Allowing single member limited liability companies (SMLLCs) that are PTE owners to claim the PTE elective tax credit.

1. 540 Booklet, page 4, 2021 Tax Law Changes/What’s New, column 2, paragraph 3, Shuttered Venue Operator Grants.
2. 540 Booklet, page 4, 2021 Tax Law Changes/What’s New, column 2, paragraph 5, Restaurant Revitalization Grants.
3. 540 Booklet, 2021 Tax Law Changes/What’s New, page 5, column 1, paragraph 9, Reporting Requirements.
4. 540 Booklet, 2021 Tax Law Changes/What’s New, page 5, column 2, paragraph 2, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
5. 540 Booklet, page 43 / Instructions for Sch. CA (540) (flat), page 1, What’s New, column 1, paragraph 1, Reporting Requirements.
6. 540 Booklet, page 43 / Instructions for Sch. CA (540) (flat), page 1, What’s New, column 2, paragraphs 2 and 3, Shuttered Venue Operator Grants and Restaurant Revitalization Grants.
7. 540 Booklet, page 47 / Instructions for Sch. CA (540) (flat), page 5, line 3, Business income or (Loss), column 2, after the Paycheck Protection Program loans forgiveness paragraphs.
8. 540 Booklet, page 49 / Instructions for Sch. CA (540) (flat), page 7, column 2, line 8z, Other income, Shuttered venue operator grants and Restaurant revitalization grants paragraphs.

1. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 7.
2. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 9.
3. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 19.
4. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 23.
5. HTML page for Sch. CA (540) instructions, What’s New, paragraph 1.
6. HTML page for Sch. CA (540) instructions, What’s New, paragraphs 10 and 11.
7. HTML page for Sch. CA (540) instructions, Specific Line Instructions, Part I – Income Adjustment Schedule; Section B – Additional Income, Line 3 – Business Income or (Loss), after Paycheck Protection Program loans forgiveness paragraphs.
8. HTML page for Sch. CA (540) instructions, Specific Line Instructions, Part I – Income Adjustment Schedule, Section B – Additional Income, Line 8 – Other Income, z. Other income, paragraphs 8 and 9.

1. We modified existing instructions.
2. We removed existing instructions.
3. We modified existing instructions.
4. We modified existing instructions.
5. We modified existing instructions.
6. We modified existing instructions.
7. We added new instructions.
8. We removed existing instructions.

1 – 8.
SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

SB 113 also expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026.

As part of FTB’s reporting requirements, taxpayers who benefited from the Restaurant Revitalization Grant and the Shuttered Venue Operator Grant should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 1, What’s New, column 1, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
2. Page 8, Credit Table, Current Credits, row 19, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. Under What’s New, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners paragraph.
2. Credit Table, Current Credits, row 19, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. We modified existing instructions.
2. We modified existing instructions.

1 – 2.
SB 113, chaptered on February 9, 2022, expands the Pass-Through Entity (PTE) elective tax benefits by:

• Repealing the tentative minimum tax (TMT) limitation on the PTE elective tax credit;
• Allowing partnerships/S corporations/LLCs with owners that are partnerships to make the election (although the tax can’t be paid on behalf of the partnership owner);
• Allowing single member limited liability companies (SMLLCs) that are PTE owners to claim the PTE elective tax credit.

1. Form 3804-CR, Under the title of the form on the left side of the form, Entity section in the Name field.
2. Instructions, Page 1, Column 1, What’s New, 2nd paragraph, 1st sentence, 5th line.
3. Instructions, Page 1, Column 1, What’s New, 2nd paragraph, 2nd sentence.
4. Instructions, Page 1, Column 1, What’s New, 4th paragraph, new.
5. Instructions, Page 1, Column 1, General Information, Business Credit Limitation, 2nd paragraph, last sentence.

6 – 7.

Instructions, Page 1, Column 1, Purpose, 1st paragraph, 1st sentence.

8 – 9.

Instructions, Page 1, Column 1, Definitions, Electing qualified PTE, 3rd sentence and 4th sentence.

10. Instructions, Page 1, Column 2, Definitions, PTE elective tax.

11 – 12.

Instructions, Page 1, Column 2, Definitions, Qualified taxpayer.

13 – 14.

Instructions, Page 1, Column 2, Definitions, Qualified amount, 1st paragraph.

15 – 17.

Instructions, Page 1, Column 2, Definitions, Qualified net income.

18. Instructions, Page 1, Column 2, Description, 1st sentence.
19. Instructions, Page 1, Column 2, Limitations, new 4th paragraph.

20 – 21.

Instructions, Page 1, Column 2, Limitations, 6th paragraph.

22. Instructions, Page 2, Column 1, Carryover, 1st paragraph.
23. Instructions, Page 2, Column 1, Specific Line Instructions, under the title.
24. Instructions, Page 2, Column 1, Specific Line Instructions, Line 1, column (c) PTE elective tax credit(s), 1st paragraph.
25. Instructions, Page 2, Column 1, Specific Line Instructions, Line 1, column (c) PTE elective tax credit(s), new 2nd paragraph.

1. N/A

2 – 3.

What’s New, 2nd paragraph.

4. New, new 4th paragraph
5. General Information, Business Credit Limitation, 2nd paragraph, last sentence.

6 – 7.

Purpose, 1st paragraph, 1st sentence.

8 – 9.

Definitions, Electing qualified PTE, 3rd sentence and 4th sentence.

10. Definitions, PTE elective tax.

11 – 12.

Definitions, Qualified taxpayer.

13 – 14.

Definitions, Qualified amount, 1st paragraph.

15 – 17.

Definitions, Qualified net income.

18. Description, 1st sentence.
19. Limitations, new 4th paragraph.

20 – 21.

Limitations, 6th paragraph.

22. Carryover, 1st paragraph.
23. Specific Line Instructions, under the title, new.
24. Specific Line Instructions, Line 1, column (c) PTE elective tax credit(s), 1st paragraph.
25. Specific Line Instructions, Line 1, column (c) PTE elective tax credit(s), new 2nd paragraph.

1. Name field updated on the form.

2 – 4.

What’s New updated.

5. General Information, Business Credit Limitation updated.

6 – 7.

Purpose updated.

8 – 9.

Definitions, Electing qualified PTE updated.

10. Definitions, PTE elective tax updated.

11 – 12.

Definitions, Qualified taxpayer updated.

13 – 14.

Definitions, Qualified amounts updated.

15 – 17.

Definitions, Qualified net income updated.

18. Description updated
19. Limitations updated.

20 – 21.

Limitations section updated.

22. Carryover updated

23 – 25.

Specific Line Instructions updated.

1. Page 3, Column 1, What’s New/Tax Law Changes, First Paragraph, Restaurant Revitalization Grants.
2. Page 3, Column 1, What’s New/Tax Law Changes, Third Paragraph, Shuttered Venue Operator Grants.
3. Page 3, Column 2, What’s New/Tax Law Changes, Fifth Paragraph, Reporting Requirements.
4. Page 16, Columns 2 and 3, Line 8, Other Additions, Third Paragraph, Restaurant Revitalization Grants.
5. Page 16, Columns 2 and 3, Line 8, Other Additions, Fourth Paragraph, Shuttered Venue Operator Grants.

1. What’s New/Tax Law Changes, First Paragraph, Restaurant Revitalization Grants.
2. What’s New/Tax Law Changes, Third Paragraph, Shuttered Venue Grants.
3. What’s New/Tax Law Changes, Fifth Paragraph, Reporting Requirements.
4. Specific Line Instructions, Line 1 through Line 43, Line 8, Other Additions, Third Paragraph, Restaurant Revitalization Grants.
5. Specific Line Instructions, Line 1 through Line 43, Line 8, Other Additions, Fourth Paragraph, Shuttered Venue Grants.

1. Page 3, Column 1, What’s New/Tax Law Changes, First Paragraph deleted.
2. Page 3, Column 1, What’s New/Tax Law Changes, Third Paragraph replaced.
3. Page 3, Column 2, What’s New/Tax Law Changes, Fifth Paragraph, verbiage added.
4. Page 16, Columns 2 and 3, Specific Line Instructions, Line 8, Other additions, Third Paragraph deleted.
5. Page 16, Columns 2 and 3, Specific Line Instructions, Line 8, Other additions, Fourth Paragraph replaced.

SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100, line 8 – Other Additions. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New and Specific Line Instructions.

SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

1. Page 3, Column 1, What’s New/Tax Law Changes, Second Paragraph, Elective Tax for Pass-Through Entities (PTE) and Credits for Owners.
2. Page 3, Column 1-2, What’s New/Tax Law Changes, Third Paragraph, Restaurant Revitalization Grants.
3. Page 3, Column 2, What’s New/Tax Law Changes, Second Paragraph, Shuttered Venue Operator Grants.
4. Page 3, Column 3, What’s New/Tax Law Changes, Fourth Paragraph, Reporting Requirements.
5. Page 18, Specific Line Instructions, Line 1 through Line 44, Line 7, Other Additions, Fifth Paragraph, Restaurant Revitalization Grants.
6. Page 18, Specific Line Instructions, Line 1 through Line 44, Line 7, Other Additions, Sixth Paragraph, Shuttered Venue Operator Grants.
7. Page 23, Column 3, Schedule K and Schedule K-1 (100S), Second Paragraph after Other Loan Forgiveness.
8. Page 24, Specific Line Instructions, Line 10b, Other income (loss), Fifth Paragraph, Restaurant Revitalization Grants.
9. Page 24, Specific Line Instructions, Line 10b, Other income (loss), Sixth Paragraph, Shuttered Venue Operator Grants.

1. What’s New/Tax Law Changes, Second Paragraph, Elective Tax for Pass-Through Entities (PTE) and Credits for Owners.
2. What’s New/Tax Law Changes, Third Paragraph, Restaurant Revitalization Grants.
3. What’s New/Tax Law Changes, Fifth Paragraph, Shuttered Venue Operator Grants.
4. What’s New/Tax Law Changes, Eleventh Paragraph, Reporting Requirements.
5. Specific Line Instructions, Line 1 through Line 44, Line 7, Fifth Paragraph, Restaurant Revitalization Grants.
6. Specific Line Instructions, Line 1 through Line 44, Line 7, Sixth Paragraph, Shuttered Venue Operator Grants.
7. Schedule K and Schedule K-1 (100S), Tenth Paragraph.
8. Specific Line Instructions, Line 10b, Other income (loss), Fifth Paragraph, Restaurant Revitalization Grants.
9. Specific Line Instructions, Line 10b, Other income (loss), Sixth Paragraph, Shuttered Venue Operator Grants.

1. What’s New/Tax Law Changes, Second Paragraph updated.
2. What’s New/Tax Law Changes, Third Paragraph deleted.
3. What’s New/Tax Law Changes, Fifth Paragraph replaced.
4. What’s New/Tax Law Changes, Eleventh Paragraph updated.
5. Specific Line Instructions, Line 7, Fifth Paragraph deleted.
6. Specific Line Instructions, Line 7, Sixth Paragraph replaced.
7. Schedules, Schedule K and Schedule K-1 (100S), Tenth Paragraph added.
8. Specific Line Instructions, Line 10b, Fifth Paragraph deleted.
9. Specific Line Instructions, Line 10b, Sixth Paragraph deleted.

1.
SB 113, chaptered on February 9, 2022, expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026. As the result, we have updated the existing language under What’s New.

2, 5, 8.
SB113 also conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

3, 6, 7, 9.
In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100S, line 7 – Other Additions, and on applicable line(s) on Schedule K/ K-1 (100S), column (c). As a result, we have revised the existing Shuttered Venue Operator Grant language under What’s New and Specific Line Instructions.

4.
SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

1. 540 Booklet, page 72/540 2EZ Booklet, page 50/540NR Booklet, page 70/Instructions for Form FTB 3514 (flat), page 2, Specific Instructions, Step 1 Qualifications for All Filers, columns 1-2, Question d. Is your filing status married filing separately?
2. 540 Booklet, pages 77 – 84/540 2EZ Booklet, pages 55 – 62/540NR Booklet, pages 75 – 82/Instructions for Form FTB 3514 (flat), pages 7 – 14, 2021 Earned Income Tax Credit Table, first sentence directly below the title.

1. HTML page for 2021 Instructions for Form FTB 3514, Specific Instructions, Step 1 – Qualifications for All Filers, Question d. Is your filing status married filing separately?
2. HTML page for 2021 Instructions for Form FTB 3514, 2021 Earned Income Tax Credit Table, first sentence directly below the title.

1. We added new instructions.
2. We modified existing instructions.

1 – 2.
The American Rescue Plan Act (ARPA) of 2021 was enacted on March 11, 2021 (Public Law 117-2). The ARPA of 2021 included some changes to the federal Earned Income Tax Credit (EITC) that impacted R&TC Section 17052. This federal law change would allow those that are married and file married filing separately for federal purposes and meet all the requirements stipulated in Public Law 117-2, to qualify for the Federal EITC. California law conforms to these changes considering that California has the same rules pertaining to married individuals (filing status).

1. Page 1, Column 1, Electronic Payment section.

1. Electronic Payment section, First Paragraph added.

1. Page 3, Column 2, What’s New for 2021, Sixth Paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.

1. Page 1, What’s New, column 1, after paragraph 4.
2. Page 1, What’s New, column 1, Reporting Requirements paragraph.
3. Page 1, General Information, Who Should File, column 2, paragraph 4, Taxpayers that Benefited from the Paycheck Protection Program/Other Loan Forgiveness/Economic Injury Disaster Loan.
4. Page 1, Specific Line Instructions, column 2, paragraph 1.
5. Pages 1 – 2, Specific Line Instructions, Part I – Deductions, Credits, Exemptions, and Exclusions, Taxpayers that Benefited from the Paycheck Protection Program/Other Loan Forgiveness/Economic Injury Disaster Loan.
6. Page 2, Specific Line Instructions, Part I – Deductions, Credits, Exemptions, and Exclusions, column 1, Column (a) – Code, Chart and first paragraph directly below.

1. We added new instructions.
2. We modified existing instructions.
3. We modified existing instructions.
4. We modified existing instructions.
5. We modified existing instructions.
6. We modified existing instructions.

1 – 6.
SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income.

In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

As part of FTB’s reporting requirements, taxpayers who benefited from the Restaurant Revitalization Grant and the Shuttered Venue Operator Grant should file form FTB 4197, Information on Tax Expenditure Items.

1. Page 1, Column 1, What’s New, Second Paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
2. Page 7, Credit Table, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. Under What’s New, Second Paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
2. Credit Table, Code 242, Pass-Through Entity Elective Tax, Column 4 – Offset Tax in Section.

1. What’s New, Second Paragraph modified.
2. Replaced Section “A2” with “B1” in the Credit Table.

1 – 2.
SB 113, chaptered on February 9, 2022, expands the Pass-Through Entity (PTE) elective tax benefits by:

• Repealing the tentative minimum tax (TMT) limitation on the PTE elective tax credit;
• Allowing partnerships/S corporations/LLCs with owners that are partnerships to make the election (although the tax can’t be paid on behalf of the partnership owner);
• Allowing single member limited liability companies (SMLLCs) that are PTE owners to claim the PTE elective tax credit.

1. Page 2, Column 2, What’s New, Restaurant Revitalization Grants paragraph.
2. Page 2, Column 2, What’s New, Shuttered Venue Operator Grants paragraph.
3. Page 2, Column 3, What’s New, second paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
4. Page 3, Column 1, What’s New, Reporting Requirements paragraph.

1. Under “What’s New” ("Restaurant Revitalization Grants" paragraph).
2. Under “What’s New” (“Shuttered Venue Operator Grants” paragraph).
3. Under “What’s New,” second paragraph, (“Elective Tax for Pass-Through Entities (PTE) and Credit for Owners” paragraph).
4. Under “What’s New” (“Reporting Requirements” paragraph).

1. Existing What’s New paragraph removed.
2. Existing What’s New paragraph modified.
3. Existing What’s New paragraph modified.
4. Existing What’s New paragraph modified.

1. SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.
2. In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New.
3. SB 113 expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026. As the result, we have updated the existing language under What’s New.
4. SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

1. 540NR Booklet, page 4, 2021 Tax Law Changes/What’s New, column 2, paragraph 2, Shuttered Venue Operator Grants.
2. 540NR Booklet, page 4, 2021 Tax Law Changes/What’s New, column 2, paragraph 4, Restaurant Revitalization Grants.
3. 540NR Booklet, 2021 Tax Law Changes/What’s New, page 5, column 1, paragraph 5, Reporting Requirements.
4. 540NR Booklet, 2021 Tax Law Changes/What’s New, page 5, column 1, paragraph 8, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
5. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, What’s New, column 1, paragraph 1, Reporting Requirements.
6. 540NR Booklet, page 41 / Instructions for Sch. CA (540NR) (flat), page 1, What’s New, column 2, paragraphs 2 and 3, Shuttered Venue Operator Grants and Restaurant Revitalization Grants.
7. 540NR Booklet, page 46 / Instructions for Sch. CA (540NR) (flat), line 3, Business income or (Loss), after the Paycheck Protection Program loans forgiveness paragraphs, page 6, column 1, top of the page.
8. 540NR Booklet, page 47 / Instructions for Sch. CA (540NR) (flat), page 7, column 2, line 8z, Other income, Shuttered venue operator grants and Restaurant revitalization grants paragraphs.

1. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 7.
2. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 9.
3. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 19.
4. What’s New and Other Important Information for 2021, 2021 Tax Law Changes/What’s New, paragraph 23.
5. HTML page for Sch. CA (540NR) instructions, What’s New, paragraph 1.
6. HTML page for Sch. CA (540NR) instructions, What’s New, paragraphs 10 and 11.
7. HTML page for Sch. CA (540NR) instructions, Specific Line Instructions, Part II – Income Adjustment Schedule; Section B – Additional Income, Line 3 – Business Income or (Loss), after Paycheck Protection Program loans forgiveness paragraphs.
8. HTML page for Sch. CA (540NR) instructions, Specific Line Instructions, Part II – Income Adjustment Schedule, Section B – Additional Income, Line 8 – Other Income, z. Other income, paragraphs 8 and 9.

1. We modified existing instructions.
2. We removed existing instructions.
3. We modified existing instructions.
4. We modified existing instructions.
5. We modified existing instructions.
6. We modified existing instructions.
7. We added new instructions.
8. We removed existing instructions.

1 – 8.
SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.

In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

SB 113 also expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026.

As part of FTB’s reporting requirements, taxpayers who benefited from the Restaurant Revitalization Grant and the Shuttered Venue Operator Grant should file form FTB 4197, Information on Tax Expenditure Items.

1. Form, Page 1, Part II, Schedule of Qualified Taxpayers, header.

2 – 17.

Form, Page 1 – 2, Part II, Schedule of Qualified Taxpayers, line 1 to line 16, box a, description.

18. Instructions, Page 1, Column 1, What’s New, Second paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
19. Instructions, Page 1, Column 1, General Information, Third Paragraph.
20. Instructions, Page 1, Column 1, Purpose, First Paragraph.
21. Instructions, Page 1, Column 2, Purpose, Second Paragraph.
22. Instructions, Page 1, Column 2, Definitions, First Paragraph, Electing qualified PTE.
23. Instructions, Page 1, Column 2, Definitions, Second Paragraph, PTE Elective Tax.
24. Instructions, Page 1, Column 2, Definitions, Third Paragraph, Qualified taxpayer.
25. Instructions, Page 1, Column 2, Definitions, Fourth Paragraph, Qualified amount.
26. Instructions, Page 1, Column 2, Definitions, Fifth Paragraph, Qualified net income.
27. Instructions, Page 2, Column 1, Part II Schedule of Qualified Taxpayers, Sixth Paragraph, Qualified Taxpayer Name and TIN.
28. Instructions, Page 2, Column 2, Part II Schedule of Qualified Taxpayers, First Paragraph, Pro-rata or distributive share of qualified net income.
29. Instructions, Page 2, Column 2, Part II Schedule of Qualified Taxpayers, Third Paragraph, Elective tax credit amount.

1. Instructions, What’s New, Second paragraph, Elective Tax for Pass-Through Entities (PTE) and Credit for Owners.
2. Instructions, General Information, Third Paragraph.
3. Instructions, Purpose, First Paragraph.
4. Instructions, Purpose, Third Paragraph.
5. Instructions, Definitions, First Paragraph, Electing qualified PTE.
6. Instructions, Definitions, Second Paragraph, PTE Elective Tax.
7. Instructions, Definitions, Third Paragraph, Qualified taxpayer.
8. Instructions, Definitions, Fourth Paragraph, Qualified amount.
9. Instructions, Definitions, Fifth Paragraph, Qualified net income.
10. Instructions, Part II Schedule of Qualified Taxpayers, Sixth Paragraph, Qualified Taxpayer Name and TIN.
11. Instructions, Part II Schedule of Qualified Taxpayers, Seventh Paragraph, Pro-rata or distributive share of qualified net income.
12. Instructions, Part II Schedule of Qualified Taxpayers, Ninth Paragraph, Elective tax credit amount.

1. Form, Page 1, Part II, Schedule of Qualified Taxpayers, added text to header.

2 – 17.

Form, Page 1 – 2, Part II, Schedule of Qualified Taxpayers, line 1 to line 16, replaced box a description.

18. Instructions, Page 1, Column 1, What’s New, Second paragraph, updated text.
19. Instructions, Page 1, Column 1, General Information, Third paragraph, added text.
20. Instructions, Page 1, Column 1, Purpose, First Paragraph, added text.
21. Instructions, Page 1, Column 2, Purpose, Second Paragraph, updated text.
22. Instructions, Page 1, Column 2, Definitions, First Paragraph, Electing qualified PTE, updated text.
23. Instructions, Page 1, Column 2, Definitions, Second Paragraph, PTE Elective Tax, added text.
24. Instructions, Page 1, Column 2, Definitions, Third Paragraph, Qualified taxpayer, updated text.
25. Instructions, Page 1, Column 2, Definitions, Fourth Paragraph, Qualified amount, added text.
26. Instructions, Page 1, Column 2, Definitions, Fifth Paragraph, Qualified net income, updated text.
27. Instructions, Page 2, Column 1, Part II Schedule of Qualified Taxpayers, Sixth Paragraph, Qualified Taxpayer Name and TIN, updated text.
28. Instructions, Page 2, Column 2, Part II Schedule of Qualified Taxpayers, First Paragraph, Pro-rata or distributive share of qualified net income, updated text.
29. Instructions, Page 2, Column 2, Part II Schedule of Qualified Taxpayers, Third Paragraph, Elective tax credit amount, added text.

1 – 29.
SB 113, chaptered on February 9, 2022, expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026.

1. Page 2, Column 1, What’s New, Restaurant Revitalization Grants paragraph.
2. Page 2, Column 1, What’s New, Shuttered Venue Operator Grants paragraph.
3. Page 2, Column 3, What’s New, Paycheck Protection Paragraph (PPP) Loans Forgiveness second paragraph.
4. Page 2, Column 3, What’s New, Reporting Requirements paragraph.

1. Under “What’s New” ("Restaurant Revitalization Grants" paragraph).
2. Under “What’s New” (“Shuttered Venue Operator Grants” paragraph).
3. Under “What’s New” (“Paycheck Protection Paragraph (PPP) Loans Forgiveness” paragraph).
4. Under “What’s New” (“Reporting Requirements” paragraph).

1. Existing What’s New paragraph removed.
2. Existing What’s New paragraph modified.
3. Existing What’s New paragraph modified.
4. Existing What’s New paragraph modified.

1. SB 113, chaptered on February 9, 2022, conforms state tax law to the federal tax treatment for Restaurant Revitalization Grants. For taxable years beginning on or after January 1, 2020, California law fully conforms to this federal provision to exclude this pandemic-related financial assistance program from gross income. As a result, we have deleted verbiage that previously stated that California did not conform.
2. In addition, for taxable years beginning on or after January 1, 2019, SB 113 provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. As a result, we have revised the existing Shuttered Venue Operator Grants language under What’s New.
3. The acronym for the ARPA has to be expanded since it was removed in item #1.
4. SB 113 also requires a Section 41 reporting requirement for taxpayers that benefited from gross income exclusion and expense deductions from Shuttered Venue Operator Grant and Restaurant Revitalization Grants. As a result we have updated the existing language under What’s New.

Schedule K, Line 21a updated.

To clarify the instructions to ensure guaranteed payments will not be double counted.

Schedule K, Line 21a updated.

To clarify the instructions to ensure guaranteed payments will not be double counted.

1. Page 1, Column 1, What’s New, Second Paragraph, Elective Tax for Pass-through Entities (PTE) and Credit for Owners.
2. Page 1, Column 1, General Information, First paragraph.
3. Page 1, Column 2, Instructions, Fifth paragraph, Amount of Payment.

1. What’s New, Second paragraph updated.
2. General Information, First paragraph updated.
3. Instructions, Fifth paragraph updated.

SB 113, chaptered on February 9, 2022, expands the pass-through entity elective tax benefits for taxable years beginning on or after January 1, 2021 and before January 1, 2026.

1. Part I, Tax Return Information, Line 3.
2. Part I, Tax Return Information, Line 4.
3. Part I, Tax Return Information, Line 5.

1 – 3.
Changing the line references.

1 – 3.
Changing the line references.

1. Part I, Tax Return Information, Line 3.
2. Part I, Tax Return Information, Line 4.

1 – 2.
Changing the line references.

1 – 3.
Changing the line references.

1. Page 1, Column 2, Important Information, New California Motion Picture and Television Production Credit, 2nd paragraph after the bulleted list.
2. Page 3, Column 1, D Limitation, 3rd paragraph.

1. Important Information, New California Motion Picture and Television Production Credit, 2nd paragraph after the bulleted list.
2. D Limitation, 3rd paragraph.

1 – 2.
We added and deleted instructions.

1 – 2.
Senate Bill 132 chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production credit to reduce regular tax below the tentative minimum tax.

1. Page 7, Column 1, Credit Table, Current Credits, row 14, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4, Offset Tax in Section.

1. Credit Table, Current Credits, row 14, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4, Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. Page 8, Credit Table, Current Credits, row 19, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 19, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. Page 9, Credit Table, Current Credits, row 19, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. Credit Table, Current Credits, row 19, Code 239, Program 3.0 California Motion Picture and Television Production, Column 4 – Offset Tax in Section.

1. We modified existing instructions.

SB 132, chaptered on July 10, 2023. This bill, for taxable years beginning on or after January 1, 2020, allows the Program 3.0 California Motion Picture and Television Production Credit to reduce net tax below tentative minimum tax.

1. 100 Booklet, page 17, column 3, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. 100 Booklet, page 38, Instructions for Sch. P (100) (flat), page 6, Credit Table, Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.

1. 100 Booklet, Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. N/A – see Sch. P (100) HTML instructions.

1. N/A – see 100 Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.

1. Add one new bullet to the list of credits.
2. Replace the credit offset tax in section code.

SB 132, chaptered on July 10, 2023, allows the following credit to reduce tax below tentative minimum tax:

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.

1. 100W Booklet, page 18, column 2, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. 100W Booklet, page 36, Instructions for Sch. P (100) (flat), page 6, Credit Table, left Current Credits Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section.

1. 100W Booklet, Specific Line Instructions, Line 24 through Line 26 – Tax Credits section, seventh paragraph, new bullets #13.
2. N/A – see Sch. P (100W) HTML instructions.

1. N/A – see 100W Booklet HTML instructions.
2. Credit Table, Current Credit Table, Program 3.0 California Motion Picture and Television Production, Offset Tax in Section column.

1. Add a new bullet to the list of credits.
2. Replace the credit offset tax in section code.

SB 132, chaptered on July 10, 2023, allows the following credit to reduce tax below tentative minimum tax:

• For taxable years beginning on or after January 1, 2020 the Program 3.0 California Motion Picture and Television Production Credit.

1. 540NR Booklet, page 46 / Instructions for Sch. CA (540NR) (flat), page 8, column 2, last paragraph.
2. 540NR Booklet, page 50 / Instructions for Sch. CA (540NR) (flat), page 12, column 1, Line 21 – Other Expenses paragraphs, last bullet point.

1. Specific Line Instructions; Part II – Income Adjustment Schedule; Section C – Adjustments to Income; Line 22 instructions, the last paragraph before Line 23 – Total instruction.
2. Specific Line Instructions; Part III – Adjustments to Federal Itemized Deductions; Line 21 – Other Expenses; last bullet point before Claim of Right paragraph.

1. We removed existing instructions.
2. We removed existing instructions.

1 – 2.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540NR).

1. 540 Booklet, page 49 / Instructions for Sch. CA (540) (flat), page 9, column 1, paragraph 2.
2. 540 Booklet, page 50 / Instructions for Sch. CA (540) (flat), page 10, column 2, Line 21 – Other Expenses paragraphs, last bullet point.

1. Specific Line Instructions; Part I – Income Adjustment Schedule; Section C – Adjustments to Income; Line 22 instructions, the last paragraph before Line 23 – Total instruction.
2. Specific Line Instructions; Part II – Adjustments to Federal Itemized Deductions; Line 21 – Other Expenses; last bullet point before Claim of Right paragraph.

1. We removed existing instructions.
2. We removed existing instructions.

1 & 2.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540).

1. Page 1, Column 1, What’s New, Main Street Small Business Tax Credit, second paragraph.

1. No HTML instructions.

1. Page 1, Column 1, What’s New, Main Street Small Business Tax Credit, second paragraph, first sentence deleted.

1. Page 3, column 1, immediately under What’s New section title.
2. Page 3, column 3, paragraph 4 – Paycheck Protection Program (PPP) Loans Forgiveness.
3. Page 15, Other Income/Loss section, below bullet point #1.
4. Page 20, bullet point # 2, columns 1 through 3.
5. Page 23, item # 3, column 3, last bullet point.

1. We added new instructions.
2. We modified existing instructions.
3. We added new instructions.
4. We removed existing instructions.
5. We removed existing instructions.

1 & 3.
The following bills were chaptered on September 29, 2022, and they provide an exclusion from gross income for California purposes as follows:

• AB 1249, for taxable years beginning before January 1, 2028, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement from the Fire Victims Trust.
• SB 1246, for taxable years beginning before January 1, 2027, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement for claims associated with the 2017 Thomas Fire and the 2018 Woolsey Fire.

Since federal law has no similar exclusion for those provisions above, an adjustment is needed on Schedule CA (540 or 540NR) and on applicable tax return for each one of those items.

2.
AB 158 was chaptered on September 29, 2022, and it provides that gross income exclusion for any covered loan amounts forgiven pursuant to the federal PPP Extension Act of 2021 are effective for taxable years beginning on or after January 1, 2019.

4 & 5.
California conforms to IRS final Treas. Reg. Section 1.67-4 issued on 10/19/2022, that provide guidance for decedents’ estates and non-grantor trusts clarifying that certain deductions of such estates and non-grantor trusts as income adjustment to AGI and are not miscellaneous itemized deductions. Since California conforms, no adjustment is needed on Schedule CA (540 or 540NR).

1. Page 2, Table of Contents, Entry lines 5 through 22.

2 – 5.

Page 3, Column 1, What’s New/Tax Law Changes, before Small Business COVID-19 Relief Grant Program paragraph.

6. Page 3, Column 1, What’s New/Tax Law Changes, Second and Third paragraphs, Paycheck Protection Program (PPP) Loans Forgiveness.
7. Page 3, Column 2, What’s New/Tax Law Changes, Second paragraph, Advance Grant Amount.
8. Page 13, Column 3, BB Tax Credits, Second paragraph.
9. Page 17, Column 2, Line 7 – Other additions, before Paycheck Protection Program Loans Forgiveness.
10. Page 17, Column 2, Line 7 – Other additions, Fifth paragraph.
11. Page 17, Column 3, Line 7 – Other additions, before Penalty Assessed by Professional Sports League.

12 – 13.

Page 18, Column 1, Line 12 – Other deductions, before Small Business COVID-19 Relief Grant Program.

14. Page 19, Column 2, Line 22 through Line 24 – Tax Credits, Sixth paragraph.
15. Page 22, Column 1, Schedule K and Schedule K-1 (100S), First paragraph.

16 – 17.

Page 22, Column 1, Schedule K and Schedule K-1 (100S), before Special Reporting for R&TC Section 41.

18. Page 22, Column 1, Schedule K and Schedule K-1 (100S), Specific Line Instructions, First Paragraph.

19 – 20.

Page 22, Column 3, Schedule K and Schedule K-1 (100S), Specific Line Instructions, Line 10b – Other income (loss), before Small Business COVID-19 Relief Grant Program.

21. Page 25, Column 3, Schedule L – Balance Sheet, First paragraph.
22. Page 27 and Page 28, new blank pages added.

1. Not applicable.

2 – 5.

What’s New/Tax Law Changes, Paragraphs added before Small Business COVID-19 Relief Grant Program.

6. What’s New/Tax Law Changes, Second and Third paragraphs updated.
7. What’s New/Tax Law Changes, Fifth paragraph updated.
8. BB Tax Credits, Second paragraph updated.
9. Line 7 – Other additions, Paragraph added before Paycheck Protection Program Loans Forgiveness.
10. Line 7 – Other additions, Fifth paragraph updated.
11. Line 7 – Other additions, Paragraph added before Penalty Assessed by Professional Sports League.

12 – 13.

Line 12 – Other deductions, Paragraphs added before Small Business COVID-19 Relief Grant Program.

14. Line 22 through Line 24 – Tax Credits, Sixth paragraph updated.
15. Schedule K and Schedule K-1 (100S), Sixth paragraph updated.

16 – 17.

Schedule K and Schedule K-1 (100S), Paragraphs added before Special Reporting for R&TC Section 41.

18. Schedule K and Schedule K-1 (100S), Specific Line Instructions, First paragraph updated.

19 – 20.

Schedule K and Schedule K-1 (100S), Specific Line Instructions, Line 10b – Other income (loss) Paragraphs added before Small Business COVID-19 Relief Grant Program.

21. Schedule L – Balance Sheet, First paragraph updated.
22. Not applicable.

1. Page numbers updated.
2. New paragraph added.
3. New paragraph added.
4. New paragraph added.
5. New paragraph added.
6. Updated to use abbreviation.
7. Updated to use abbreviation.
8. Page reference updated.
9. New paragraph added.
10. Updated to use abbreviation.
11. New paragraph added.
12. New paragraph added.
13. New paragraph added.
14. Page reference updated.
15. Updated to use abbreviation.
16. New paragraph added.
17. New paragraph added.
18. Page reference updated.
19. New paragraph added.
20. New paragraph added.
21. Page reference updated.
22. Blank pages added.

1, 8, 14, 18, 21.
Updated to correct the page references.

2, 11, 16.
AB 80, which chaptered on April 29, 2021, provides modified conformity to this federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100S, line 7 – Other additions, and on applicable line(s) on Schedule K/K-1(100S), column (c).

3, 4, 12, 13, 19, 20.
AB 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant the California Microbusiness COVID-19 Relief Program and California Venues Grant Program. Federal law has no similar exclusion. If an adjustment is needed, enter on Form 100S, line 12 – other deductions the amount of this type of income, and on applicable line(s) on Schedule K/K-1(100S), line 10b, column (c).

5, 9, 17.
SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision for taxable years beginning on or after January 1, 2019, which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100S, line 7 – Other Additions, and on applicable line(s) on Schedule K/ K-1 (100S), column (c).

6, 7, 10, 15 have been updated to add the abbreviation.

22. Add blank pages.

1. Page 3, Column 2, What’s New/Tax Law Changes, First through Fourth Paragraph positions.
2. Page 16, Column 3, Line 8 – Other additions, Third Paragraph position.
3. Page 16, Column 3, Line 8 – Other additions, Fifth Paragraph position.
4. Page 17, Column 2, Line 15 – Other deductions, Third Paragraph position.
5. Page 17, Column 2, Line 15 – Other deductions, Fourth Paragraph position.

1. What’s New/Tax Law Changes, First through Fourth Paragraph positions.
2. Specific Line Instructions, Line 1 through Line 43, Line 8 – Other additions, Third Paragraph position.
3. Specific Line Instructions, Line 1 through Line 43, Line 8 – Other additions, Fifth Paragraph position.
4. Specific Line Instructions, Line 1 through Line 43, Line 15 – Other deductions, Third Paragraph position.
5. Specific Line Instructions, Line 1 through Line 43, Line 15 – Other deductions, Fourth Paragraph position.

1. Page 3, Column 2, What’s New/Tax Law Changes, First through Fourth Paragraph positions, new paragraphs added.
2. Page 16, Column 3, Line 8 – Other additions, Third Paragraph position, new paragraph added.
3. Page 16, Column 3, Line 8 – Other additions, Fifth Paragraph position, new paragraph added.
4. Page 17, Column 2, Line 15 – Other deductions, Third Paragraph position, new paragraph added.
5. Page 17, Column 2, Line 15 – Other deductions, Fourth Paragraph position, new paragraph added.

1. Added What’s New/Tax Law Changes paragraphs for the Shuttered Venue Operator Grant, Other Loan Forgiveness, California Microbusiness COVID-19 Relief Grant and California Venues Grant as a result of Assembly Bills 80 and 176, and Senate Bill 113 for the reasons explained in Items 2 through 5, below.
2. Senate Bill 113, which chaptered on February 9, 2022, provides modified conformity to the federal shuttered venue operator grant provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100W, line 8 – Other additions.
3. Assembly Bill 80, which chaptered on April 29, 2021, provides modified conformity to the federal other loan forgiveness provisions under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100W, line 8 – Other additions.
4. Assembly Bill 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program. Federal law has no similar exclusion. If an adjustment is needed, enter the amount of this type of income on Form 100W, line 15 – Other Deductions.
5. Assembly Bill 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant to the California Venues Grant Program. Federal law has no similar exclusion. If an adjustment is needed, enter the amount of this type of income on Form 100W, line 15 – Other Deductions.

1. 540 Booklet, page 2, Table of Contents, page numbers starting from “Which Form Should I Use?” through “Automated Phone Service”.
2. 540 Booklet, page 2, column 1, $$$ for You, paragraph 4, Refund of Excess State Disability Insurance (SDI) paragraph.
3. 540 Booklet, page 3, Do I Have to File?, California Gross Income/California Adjusted Gross Income chart, last row, Dependent of another person, column 3.
4. 540 Booklet, page 4, What’s New and Other Important Information for 2020, column 1, after the American Rescue Plan Unemployment Compensation paragraph.
5. 540 Booklet, page 4, What’s New and Other Important Information for 2020, column 2, paragraph 2 within the Dependent Exemption Credit with No ID issue.
6. 540 Booklet, page 5, column 1, after the Advance Grant Amount paragraph.
7. 540 Booklet, page 6, column 2, Schedule X, California Explanation of Amended Return Changes paragraph.
8. 540 Booklet, between page 8 and page 9.
9. 540 Booklet, page 9, column 1, Before You Begin, paragraph 5.
10. 540 Booklet, page 11, column 2, Tax, Line 31 instructions, bullet points 1 and 2.
11. 540 Booklet, page 12, column 2, Special Credits and Nonrefundable Credits, paragraph 1.
12. 540 Booklet, page 13, column 2, Line 46 instructions.
13. 540 Booklet, page 15, column 2, paragraph 8, immediately before Use Tax Worksheet.
14. 540 Booklet, page 23, Credit Chart, rows 2, 3, 5, 11, 17 and 23 (header row is not counted), column 1.
15. 540 Booklet, page 24, Frequently Asked Questions, #6 – How can I check on the status of my refund?, paragraph 2.
16. 540 Booklet, page 25, Additional Information, column 1, California Use Tax General Information, paragraph 8.
17. 540 Booklet, page 28, Contacting the Franchise Tax Board, last sentence.
18. 540 Booklet, page 39 / Instructions for Sch. CA (flat), page 1, column 1, immediately under What’s New.
19. 540 Booklet, page 42 / Instructions for Sch. CA (flat), page 4, column 2, Line 3 – Business Income or (Loss), bullet point 2.
20. 540 Booklet, page 42 / Instructions for Sch. CA (flat), page 4, column 2, Line 3 – Business Income or (Loss), before the Paycheck Protection Program loans forgiveness paragraph.
21. 540 Booklet, page 43 / Instructions for Sch. CA (flat), page 5, column 2, under the Business deductions related to list, after 5th bullet.
22. 540 Booklet, page 44 / Instructions for Sch. CA (flat), page 6, column 1, Line 8 – Other income, f. Other, after the Unemployment compensation exclusion paragraph.
23. 540 Booklet, between page 48 and page 49.
24. 540 Booklet, page 61, 2021 California Estimated Tax Worksheet within Form 540-ES instructions, line 17.

1. N/A
2. N/A
3. N/A
4. What's New and Other Important Information for 2020, 2020 Tax Law Changes/What's New, after the American Rescue Plan Unemployment Compensation paragraph.
5. N/A
6. What's New and Other Important Information for 2020, 2020 Tax Law Changes/What's New, after the Advance Grant Amount paragraph.
7. N/A
8. N/A
9. N/A
10. N/A
11. N/A
12. N/A
13. N/A
14. N/A
15. N/A
16. N/A
17. N/A
18. HTML page for Sch. CA (540) instructions, immediately under What's New.
19. N/A
20. HTML page for Sch. CA (540) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 3 – Business Income or (Loss), before the Paycheck Protection Program loan forgiveness paragraph.
21. HTML page for Sch. CA (540) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 3 – Business Income or (Loss), under the Business deductions related to list, after 5th bullet.
22. HTML page for Sch. CA (540) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 8 – Other Income, f. Other, after the Unemployment compensation exclusion paragraph.
23. N/A
24. N/A

1, 2, 3, 5, 7, 9 – 17, 24.
We updated page number references.

4, 6, 8, 20 – 22.
We added new instructions.

8 & 23.
We inserted intentional blank pages.

19.
We modified existing instructions.

1, 2, 3, 5, 7, 9 – 17, 24.
Additional text from this revision results in additional pages to the booklet and renumbering of pages throughout the booklet.

4, 6, 18, 20, 22.
AB 80, chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

SB 151, chaptered on July 12, 2021, provides an exclusion from gross income for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Grant Program administered by the Office of Small Business Advocate. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540).

AB 176, chaptered on September 23, 2021, provides technical and clarifying changes to the California Microbusiness COVID-19 Relief Grant Program and the California Venues Grant Program.

Additionally, AB 176 provides an exclusion from gross income for grant allocations received pursuant to the California Venues Grant Program, and for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Program for corporate taxpayers. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

8 & 23.
We inserted intentional blank pages so that forms start on odd-numbered pages.

19.
Additional text resulted in text movement and a reference to text position needed to be updated.

21.
The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created Employee Retention Credit, which has since been extended by the federal Taxpayer Certainty and Disaster Relief Act of 2020 and by the federal American Rescue Plan Act of 2021. Employers who claim these credits for federal purposes must reduce their wage expense by the amount of the credits. Since California has no similar credits, an adjustment is needed on Schedule CA (540) for employers to fully claim the deduction.

1. Page 2, Table of Contents, Entry Lines 5 through 17.
2. Page 3, Column 1, What’s New/Tax Law Changes, First through Fourth Paragraph positions.
3. Page 13, Section Y, California Use Tax, Column 3, Seventh Paragraph position.
4. Page 15, Column 3, Line 8 – Other additions, Third Paragraph position.
5. Page 16, Column 1, Line 8 – Other additions, Fifth Paragraph position.
6. Page 16, Column 2, Line 15 – Other deductions, Third Paragraph position.
7. Page 16, Column 2, Line 15 – Other deductions, Fourth Paragraph position.
8. Page 17, Column 2, Line 24 through Line 26 – Tax credits, Eighth Paragraph position.
9. Page 17, Column 3, Line 36 – Use tax, Third Paragraph position.
10. Page 17, Column 3, Line 36 – Use tax, Fourth Paragraph position.
11. Page 19, Column 2, Schedule G – Bad Debts Reserve Method, First Paragraph position.
12. Page 20, Column 3, Schedule M-1 – Reconciliation of Income (Loss) per Books with Income (Loss) per Return, Second Paragraph position, Reporting Requirements.
13. Page 22, This Page Left Intentionally Blank.

1. Not Applicable.
2. What’s New/Tax Law Changes, First through Fourth Paragraph positions.
3. Not Applicable.
4. Specific Line Instructions, Line 1 through Line 43, Line 8 – Other additions, Third Paragraph position.
5. Specific Line Instructions, Line 1 through Line 43, Line 8 – Other additions, Fifth Paragraph position.
6. Specific Line Instructions, Line 1 through Line 43, Line 15 – Other deductions, Third Paragraph position
7. Specific Line Instructions, Line 1 through Line 43, Line 15 – Other deductions, Fourth Paragraph position
8. Not Applicable.
9. Not Applicable.
10. Not Applicable.
11. Not Applicable.
12. Not Applicable.
13. Not Applicable.

1. Page 2, Table of Contents, Entry Lines 5 through 17, page references updated.
2. Page 3, Column 1, What’s New/Tax Law Changes, First through Fourth Paragraph positions, new paragraphs added.
3. Page 13, Section Y, California Use Tax, Column 3, Seventh Paragraph position, page reference updated.
4. Page 15, Column 3, Line 8 – Other additions, Third Paragraph position, new paragraph added.
5. Page 16, Column 1, Line 8 – Other additions, Fifth Paragraph position, new paragraph added.
6. Page 16, Column 2, Line 15 – Other deductions, Third Paragraph position, new paragraph added.
7. Page 16, Column 2, Line 15 – Other deductions, Fourth Paragraph position, new paragraph added.
8. Page 17, Column 2, Line 24 through Line 26 – Tax credits, Eighth Paragraph position, page reference updated.
9. Page 17, Column 3, Line 36 – Use tax, Third Paragraph position, location reference updated.
10. Page 17, Column 3, Line 36 – Use tax, Fourth Paragraph position, location reference updated.
11. Page 19, Column 2, Schedule G – Bad Debts Reserve Method, First Paragraph position, location reference updated.
12. Page 20, Column 3, Schedule M-1 – Reconciliation of Income (Loss) per Books with Income (Loss) per Return, Second Paragraph position, Reporting Requirements, page reference updated.
13. Page 22, This Page Left Intentionally Blank, new blank page added.

1. Updated page references.
2. Added What's New/Tax Law Changes paragraphs for the Shuttered Venue Operator Grant, Other Loan Forgiveness, California Microbusiness COVID-19 Relief Grant and California Venues Grant as a result of Assembly Bills 80 and 176, and Senate Bill 113 for the reasons explained in Items 4 through 7, below.
3. Updated Page references.
4. Senate Bill 113, which chaptered on February 9, 2022, provides modified conformity to the federal shuttered venue operator grant provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100, line 8 – Other additions.
5. Assembly Bill 80, which chaptered on April 29, 2021, provides modified conformity to the federal other loan forgiveness provisions under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100, line 8 – Other additions.
6. Assembly Bill 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant to the California Microbusiness COVID-19 Relief Program. Federal law has no similar exclusion. If an adjustment is needed, enter the amount of this type of income on Form 100, line 15 – Other Deductions.
7. Assembly Bill 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant to the California Venues Grant Program. Federal law has no similar exclusion. If an adjustment is needed, enter the amount of this type of income on Form 100, line 15 – Other Deductions.
8. Updated page reference.
9. Location reference updated.
10. Location reference updated.
11. Location reference updated.
12. Page reference updated.
13. Added a blank page to ensure correct page flow in the 2020 Form 100 booklet.

1. Page 2, Table of Contents.
2. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
3. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
4. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
5. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
6. Page 19, Column 1, Schedule K (568) and Schedule K-1 (568) – Partner’s Shares of Income, Deductions, Credits, etc., before Paycheck Protection Program Loans Forgiveness paragraph.
7. Page 19, Column 1, Schedule K (568) and Schedule K-1 (568) – Partner’s Shares of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
8. Page 21, Column 1, Specific Line Instructions, before Qualified Opportunity Zone paragraph.
9. Page 21, Column 1, Specific Line Instructions, before Qualified Opportunity Zone paragraph.

1. Table of Contents, page references updated.
2. What’s New, Other Loan Forgiveness paragraph added.
3. What’s New, California Microbusiness COVID-19 Relief Grant paragraph added.
4. What’s New, California Venues Grant paragraph added.
5. What’s New, Shuttered Venue Operator Grant paragraph added.
6. Schedule K (568) and Schedule K-1 (568) – Member's Shares of Income, Deductions, Credits, etc., Other Loan Forgiveness paragraph added.
7. Schedule K (568) and Schedule K-1 (568) – Member’s Shares of Income, Deductions, Credits, etc., Shuttered Venue Operator Grant paragraph added.
8. Schedule K (568) and Schedule K-1 (568), Specific Line Instructions, California Microbusiness COVID-19 Relief Grant paragraph added.
9. Schedule (568) and Schedule K-1 (568), Specific Line Instructions, California Venues Grant paragraph added.

1.
Updated page references.

2 & 7.
AB 80, which chaptered on April 29, 2021, provides modified conformity to this federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter that amount on the applicable line(s) as a column (c) adjustment.

3, 4, 8, 9.
AB 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant the California Microbusiness COVID-19 Relief Program and California Venues Grant Program. Federal law has no similar exclusion. Enter on Schedule K/K-1 (565), line 11b – Total Other Income.

5 & 6.
SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision for taxable years beginning on or after January 1, 2019, which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter that amount on the applicable line(s) as a column (c) adjustment.

1. Page 2, Table of Contents.
2. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
3. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
4. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
5. Page 3, Column 1, What’s New, before Small Business COVID-19 Relief Grant Program paragraph.
6. Page 16, Column 2, Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., before Paycheck Protection Program Loans Forgiveness paragraph.
7. Page 16, Column 2 Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., after Paycheck Protection Program Loans Forgiveness paragraph.
8. Page 19 Column 1 Income, before Qualified Opportunity Zone funds paragraph.
9. Page 19, Column 1 Income, before Qualified Opportunity Zone funds paragraph.

1. Table of Contents, page references updated.
2. What’s New, Other Loan Forgiveness paragraph added.
3. What’s New, California Microbusiness COVID-19 Relief Grant paragraph added.
4. What’s New, California Venues Grant paragraph added.
5. What’s New, Shuttered Venue Operator Grant paragraph added.
6. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., Other Loan Forgiveness paragraph added.
7. Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc., Shuttered Venue Operator Grant paragraph added.
8. Schedule K (565) and Schedule K-1 (565), Specific Line Instructions, Income, California Microbusiness COVID-19 Relief Grant paragraph added.
9. Schedule K (565) and Schedule K-1 (565), Specific Line Instructions, Income, California Venues Grant paragraph added.

1.
Updated page references.

2 & 7.
AB 80, which chaptered on April 29, 2021, provides modified conformity to this federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter that amount on the applicable line(s) as a column (c) adjustment.

3, 4, 8, 9.
AB 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant the California Microbusiness COVID-19 Relief Program and California Venues Grant Program. Federal law has no similar exclusion. Enter on Schedule K/K-1 (565), line 11b – Total Other Income.

5 & 6.
SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision for taxable years beginning on or after January 1, 2019, which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction. For California purposes, if you are an ineligible entity and deducted eligible expenses for federal purposes, enter that amount on the applicable line(s) as a column (c) adjustment.

1. Page 2, Column 1, What’s New.
2. Page 2, Column 1, What’s New.
3. Page 2, Column 1, What’s New.
4. Page 2, Column 1, What’s New.
5. Page 2, Column 1, What’s New, Excess Business Loss Limitation paragraph.
6. Page 2, Column 2, What’s New, Paycheck Protection Program paragraph.
7. 109 Booklet, between page 10 and page 11.

1 – 4.

Under “What’s New,” First through Fourth paragraph positions.

5. Under “What’s New,” Excess Business Loss Limitation paragraph.
6. Under “What’s New,” Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
7. N/A

1. What’s New, First paragraph added.
2. What’s New, Second paragraph added.
3. What’s New, Third paragraph added.
4. What’s New, Fourth paragraph added.
5. Existing What’s New paragraph modified.
6. Existing What’s New paragraph modified.
7. We inserted an intentional blank page.

1.
AB 80, which chaptered on April 29, 2021, provides modified conformity to this federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity.

2 & 3.
AB 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant the California Microbusiness COVID-19 Relief Program and California Venues Grant Program. Federal law has no similar exclusion.

4.
SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision for taxable years beginning on or after January 1, 2019, which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

5.
The CARES acronym was expanded in Item #1 added.

6.
The CAA acronym was expanded in Item #1 added.

1. Page 2, Column 1, What’s New.
2. Page 2, Column 1, What’s New.
3. Page 2, Column 1, What’s New.
4. Page 2, Column 1, What’s New.
5. Page 2, Column 3, What’s New, Excess Business Loss Limitation paragraph.
6. Page 3, Column 1, What’s New, Paycheck Protection Program paragraph.
7. Page 3, Column 1, What’s New, Advance Grant Amount paragraph.

1 – 4.

Under “What’s New,” First through Fourth paragraph positions.

5. Under “What’s New,” Excess Business Loss Limitation paragraph.
6. Under “What’s New,” Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
7. Under “What’s New,” Advance Grant Amount paragraph.

1. What’s New, First paragraph added.
2. What’s New, Second paragraph added.
3. What’s New, Third paragraph added.
4. What’s New, Fourth paragraph added.
5. Existing What’s New paragraph modified.
6. Existing What’s New paragraph modified.
7. Existing What’s New paragraph modified.

1.
AB 80, which chaptered on April 29, 2021, provides modified conformity to this federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity.

2 & 3.
AB 176, which chaptered on September 23, 2021, allows an exclusion from gross income grant allocations received by a taxpayer pursuant the California Microbusiness COVID-19 Relief Program and California Venues Grant Program. Federal law has no similar exclusion.

4.
SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision for taxable years beginning on or after January 1, 2019, which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

1. 540NR Booklet, page 4, What’s New and Other Important Information for 2020, column 1, after the American Rescue Plan Unemployment Compensation paragraph.
2. 540NR Booklet, page 4, What’s New and Other Important Information for 2020, column 2, after the Advance Grant Amount paragraph.
3. 540NR Booklet, page 39 / Instructions for Sch. CA (540NR) (flat), page 1, column 1, immediately under What’s New.
4. 540NR Booklet, page 42 / Instructions for Sch. CA (540NR) (flat), page 4, column 2, Section B – Additional Income, Line 3 – Business Income or (Loss), bullet point 2.
5. 540NR Booklet, page 43 / Instructions for Sch. CA (540NR) (flat), page 5, column 1, before the Paycheck Protection Program loans forgiveness paragraph.
6. 540NR Booklet, page 43 / Instructions for Sch. CA (540NR) (flat), page 5, column 2, under the Business deductions related to list, after 5th bullet.
7. 540NR Booklet, page 44 / Instructions for Sch. CA (540NR) (flat), page 6, column 2, Line 8 – Other income, f. Other, after the Unemployment compensation exclusion paragraph.

1. What’s New and Other Important Information for 2020, 2020 Tax Law Changes/What’s New, after the American Rescue Plan Unemployment Compensation paragraph.
2. What’s New and Other Important Information for 2020, 2020 Tax Law Changes/What’s New, after the Advance Grant Amount paragraph.
3. HTML page for Sch. CA (540NR) instructions, immediately under What’s New.
4. N/A
5. HTML page for Sch. CA (540NR) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 3 – Business Income or (Loss), before the Paycheck Protection Program loan forgiveness paragraph.
6. HTML page for Sch. CA (540NR) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 3 – Business Income or (Loss), under the Business deductions related to list, after 5th bullet.
7. HTML page for Sch. CA (540NR) instructions, Specific Line Instructions, Column B and Column C – Subtractions and Additions, Section B – Additional Income, Line 8 – Other Income, f. Other, after the Unemployment compensation exclusion paragraph.

1 – 3 & 5 – 7.
We added new instructions.

4:
We modified existing instructions.

1 – 3, 5 & 7.
AB 80, chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540NR) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

SB 151, chaptered on July 12, 2021, provides an exclusion from gross income for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Grant Program administered by the Office of Small Business Advocate. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540NR).

AB 176, chaptered on September 23, 2021, provides technical and clarifying changes to the California Microbusiness COVID-19 Relief Grant Program and the California Venues Grant Program.

Additionally, AB 176 provides an exclusion from gross income for grant allocations received pursuant to the California Venues Grant Program, and for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Program for corporate taxpayers. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540NR) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

SB 113, chaptered on February 9, 2022, provides conformity to the federal Shuttered Venue Operator Grant provision which allows a gross income exclusion and provides modified conformity in regards to an eligible expense deduction.

4.
Additional text resulted in text movement and a reference to text position needed to be updated.

6.
The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created Employee Retention Credit, which has since been extended by the federal Taxpayer Certainty and Disaster Relief Act of 2020 and by the federal American Rescue Plan Act of 2021. Employers who claim these credits for federal purposes must reduce their wage expense by the amount of the credits. Since California has no similar credits, an adjustment is needed on Schedule CA (540NR) for employers to fully claim the deduction.

Sch. P (540NR) instructions, page 8, Section C Instructions, Column Instructions paragraph, column (b).

Specific Line Instructions, Part III, Column Instructions (below Section C Instructions for Line 22 and Line 23), column (b).

Removed instructions related to the business credit limitation from column (b) instructions.

The instructions were removed for clarity since the business credit limitation only applies to Part III, Sections A and B, column (b), and it does not apply to Section C, column (b).

Sch. P (540) instructions, page 7, column 2, Section C Instructions, Column Instructions paragraph, column (b).

Specific Line Instructions, Part III, Column Instructions (below Section C Instructions for Line 22 and Line 23), column (b).

Removed instructions related to the business credit limitation from column (b) instructions.

The instructions were removed for clarity since the business credit limitation only applies to Part III, Sections A and B, column (b), and it does not apply to Section C, column (b).

1. Page 3, column 1, after American Rescue Plan Unemployment Compensation paragraph and before Small Business COVID-19 Relief Grant Program paragraph.
2. Business Income or (Loss) – Adjustment to Basis or Business Deductions section, Page 13, above the Employer wage expenses for Work Opportunity Credit bullet, columns 1 through 3.

1. Added new instructions.
2. Added new instructions.

1 – 2.
The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created Employee Retention Credit, which has since been extended by the federal Taxpayer Certainty and Disaster Relief Act of 2020 and by the federal American Rescue Plan Act of 2021. Employers who claim these credits for federal purposes must reduce their wage expense by the amount of the credits. Since California has no similar credits, an adjustment is needed on Schedule CA (540 or 540NR) for employers to fully claim the deduction.

1. Page 3, column 2, after CARES Act paragraphs and before Paycheck Protection Program (PPP) Loans Forgiveness paragraph.
2. Page 11, Business Income or (Loss) – Adjustment to Basis or Business Deductions, bullet point 1, column 1.
3. Page 15, Other Income/Loss, after bullet point 1, columns 1 through 3.

1. Added new instructions.
2. Modified existing instructions.
3. Added new instructions.

1 – 3.
AB 80, chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540 or 540NR) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

SB 151, chaptered on July 12, 2021, provides an exclusion from gross income for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Grant Program administered by the Office of Small Business Advocate. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540 or 540NR).

AB 176, chaptered on September 23, 2021, provides technical and clarifying changes to the California Microbusiness COVID-19 Relief Grant Program and the California Venues Grant Program.

Additionally, AB 176 provides an exclusion from gross income for grant allocations received pursuant to the California Venues Grant Program, and for grant allocations received pursuant to the California Microbusiness COVID-19 Relief Program for corporate taxpayers. Since federal law has no similar exclusion, an adjustment is needed on Schedule CA (540 or 540NR) for personal income taxpayers, or on applicable line(s) of applicable tax returns.

1. Page 29, Column 2, Step 5, Line 13.
2. Page 30, column 1, Step 5, Line 14.

HTML

1. FTB 3514 instructions (HTML), Line 13, first paragraph.
2. FTB 3514 instructions (HTML), Line 14, first paragraph.

1. Modified existing instructions.
2. Modified existing instructions.

1. Page 3, Column 1, What’s New, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Page 3, Column 1, What’s New, after PPP Loan Forgiveness paragraphs.

HTML

1. Under “What’s New” (below the "New Donated Fresh Fruits or Vegetables Credit" paragraph).
2. Under “What’s New” (under the Paycheck Protection (PPP) Loan Forgiveness paragraphs).

1. Existing What’s New paragraph modified.
2. What’s New paragraph added.

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

1. Page 3, Column 2, What’s New, after “Exemption from First Taxable Year Annual Tax” and above “Pass-Through Entity Annual Withholding Return”.
2. Page 3, Column 2, What’s New, after new “Paycheck Protection Program (PPP) Loan Forgiveness” paragraph.
3. Page 16, Column 1, under “Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.”, below “Purpose of Schedules” and above “Special Reporting for R&TC Section 41” paragraph.

HTML

1. Under “What’s New”, after “Special Reporting for R&TC Section 41” and above “Exemption from First Taxable Year Annual Tax”.
2. Under “What’s New”, after new “Paycheck Protection Program (PPP) Loan Forgiveness” paragraph.
3. Under “Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.”, above “Special Reporting for R&TC Section 41” paragraph.

1. Existing What New’s paragraph modified.
2. What’s New’s paragraph added.
3. Existing instructions modified.

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

1. Page 3, Column 1, What’s New, after “Special Reporting for R&TC Section 41” and above “Exemption from First Taxable Year Annual Tax”.
2. Page 3, Column 1, What’s New, after new “Paycheck Protection Program (PPP) Loan Forgiveness” paragraph.
3. Page 19, Column 1, under “Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.”, below “Purpose of Schedules” and above “Special Reporting for R&TC Section 41” paragraph.

HTML

1. Under “What’s New”, after “Special Reporting for R&TC Section 41” and above “Exemption from First Taxable Year Annual Tax”.
2. Under “What’s New”, after new “Paycheck Protection Program (PPP) Loan Forgiveness” paragraph.
3. Under “Schedule K (565) and Schedule K-1 (565) – Partner’s Shares of Income, Deductions, Credits, etc.”, above “Special Reporting for R&TC Section 41” paragraph.

1. Existing What New’s paragraph modified.
2. What’s New’s paragraph added.
3. Existing instructions modified.

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

1. Page 3, What’s New, Column 2, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Page 3, What’s New, Column 2, after the Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
3. Page 9, Business Income or (Loss) – Depreciation, Amortization, and Property Expensing.
4. Page 11, Business Income or (Loss) – Adjustments to Basis or Business Deductions, First bullet, Paycheck protection program loan forgiveness, Column 2 and Column 3.

1. Modified existing instructions.
2. Added new instructions.
3. Added new instructions.
4. Modified existing instructions.

1 & 4.
AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540 or 540NR).

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

2.
Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

3.
For federal purposes, under the Consolidated Appropriations Act, 2021, the recovery period, for taxable years beginning after 12/31/2017, is 30 years for residential rental property held by an electing real property trade or business that was placed in service prior to 01/01/2018, but that was not subject to ADS prior to that date. California does not conform to the federal change in the recovery period. As a result, a federal/state difference may exist and an adjustment may be needed on Schedule CA (540 or 540NR).

1. Page 3, Column 2, What’s New/Tax Law Changes, first paragraph.
2. 100W Booklet, Page 3, Column 2, What’s New/Tax Law Changes, above “R&TC Section 41 Reporting Requirements”.
3. 100W Booklet, Page 16, Column 3, Line 8 – Other Additions, third paragraph.

1. 100W Instructions, What’s New/Tax Law Changes, first paragraph.
2. 100W Instructions, What’s New/Tax Law Changes, above “R&TC Section 41 Reporting Requirements”.
3. 100W Instructions, Specific Line Instructions, Line 8, Other Additions, above “California Ordinary Net Gain or Loss”.

1. Page 3, Column 1, What’s New/Tax Law Changes, second paragraph.
2. Page 3, Column 2, What’s New/Tax Law Changes, above “Main Street Small Business Tax Credit”.
3. Page 15, Column 3, Line 8 – Other Additions, third paragraph.

1. What’s New/Tax Law Changes, second paragraph.
2. What’s New/Tax Law Changes, above “Main Street Small Business Tax Credit” paragraph.
3. Specific Line Instructions, Line 8 – Other Additions, third paragraph.

AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidate Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100, Line 8, Other additions.

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

1. Page 3, Column 1, What’s New/Tax Law Changes, Second paragraph.
2. Page 3, Column 2, What’s New/Tax Law Changes.
3. Page 17, Column 2, Line 7 – Other additions.
4. Page 22, Column 1, Schedule K and Schedule K-1 (100S).

1. Under “What’s New/Tax Law Changes”, Second paragraph.
2. Under “What’s New/Tax Law Changes” (above the “Main Street Small Business Tax Credit” paragraph).
3. Under “Line 7 – Other additions” (above the “Penalty Assessed by Professional Sports League” paragraph).
4. Under “Schedule K and Schedule K-1 (100S)” section, (below the “Substitute Forms” paragraph).

1. Existing What’s New/Tax Law Changes paragraph modified.
2. What’s New/Tax Law Changes paragraph added.
3. Existing line instructions modified.
4. Existing instructions modified to the Schedule K and Schedule K-1 (100S).

AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Form 100S, line 7 – Other additions, and on applicable line(s) on Schedule K/K-1(100S), column (c).

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

1. Page 4 of 540 booklet, column 2, 2020 Tax Law Changes/What’s New, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Page 4 of 540 booklet, column 2, 2020 Tax Law Changes/What’s New, after PPP Loan Forgiveness paragraphs.
3. Page 39 of 540 booklet/Page 1 of flat Sch. CA (540) instructions, column 1, What’s New, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
4. Page 39 of 540 booklet/Page 1 of flat Sch. CA (540) instructions, column 1, What’s New, after PPP Loan Forgiveness paragraphs.
5. Page 42 of 540 booklet/Page 4 of flat Sch. CA (540) instructions, column 2, Line 3.
6. Page 75 of 540 booklet/Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 13.
7. Page 76 of 540 booklet/Page 4 of flat FTB 3514 instructions, column 1, Step 5, Line 14.

1. Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Added a new paragraph after PPP Loan Forgiveness paragraphs.
3. Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
4. Added a new paragraph after PPP Loan Forgiveness paragraphs.
5. Paycheck Protection Program loan forgiveness paragraph.
6. Line 13, first paragraph.
7. Line 14, first paragraph.

1. Modified existing instructions.
2. Added a new paragraph.
3. Modified existing instructions.
4. Added a new paragraph.
5. Modified existing instructions.
6. Modified existing instructions.
7. Modified existing instructions.

1 – 5.
AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540), line 3, column C (Additions).

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

6 – 7.
Taxpayers may elect to include or exclude Medicaid waiver payments or IHSS payments that are nontaxable for federal purposes as wages/CA earned income for purposes of qualifying for CA EITC.

1. Page 4 of 540NR booklet, column 2, 2020 Tax Law Changes/What’s New, Paycheck Protection Program (PPP) loan forgiveness paragraphs.
2. Page 4 of 540NR booklet, column 2, 2020 Tax Law Changes/What’s New, after PPP loan forgiveness paragraphs.
3. Page 39 of 540NR booklet/Page 1 of flat Sch. CA (540NR) instructions, column 1, What’s New, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
4. Page 39 of 540NR booklet/Page 1 of flat Sch. CA (540NR) instructions, column 1, What’s New, after PPP Loan Forgiveness paragraphs.
5. Page 43 of 540NR booklet/Page 5 of flat Sch. CA (540NR) instructions, column 1, Line 3.
6. Page 67 of 540NR booklet/Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 13.
7. Page 68 of 540NR booklet/Page 4 of flat FTB 3514 instructions, column 1, Step 5, Line 14.

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1. Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Added a new paragraph after PPP Loan Forgiveness paragraphs.
3. Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
4. Added a new paragraph after PPP Loan Forgiveness paragraphs.
5. Paycheck Protection Program loan forgiveness paragraph.
6. Line 13, first paragraph.
7. Line 14, first paragraph.

1. Modified existing instructions.
2. Added a new paragraph.
3. Modified existing instructions.
4. Added a new paragraph.
5. Modified existing instructions.
6. Modified existing instructions.
7. Modified existing instructions.

1 – 5.
AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriations Act, 2021, which allows taxpayers to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. If an ineligible entity deducted eligible expenses for federal purposes, then an adjustment is needed on Schedule CA (540NR), line 3, column C (Additions).

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

6 – 7.
Taxpayers may elect to include or exclude Medicaid waiver payments or IHSS payments that are nontaxable for federal purposes as wages/CA earned income for purposes of qualifying for CA EITC.

1. Page 2, Column 2, What’s New, Paycheck Protection Program (PPP) Loan Forgiveness paragraphs.
2. Page 2, Column 3, What’s New, after PPP Loan Forgiveness paragraphs.

1. The existing What’s New paragraph, Paycheck Protection Program (PPP) Loan Forgiveness, was modified.
2. A What’s New paragraph, Advance Grant Amount, was added.

1.
AB 80, which chaptered on April 29, 2021, provides modified conformity to the federal provision under the Consolidated Appropriation Act, 2021, which allows taxpayer to deduct eligible expenses paid for with covered loan amounts, except for an ineligible entity. As a result, adjustments may be needed for eligible expenses under the PPP.

Revenue Procedure 2021-20 allows taxpayers to make an election to report the eligible expense deductions related to a PPP loan on a timely filed original 2021 tax return including extensions. If a taxpayer makes an election for federal purposes, California will follow the federal treatment for California tax purposes.

Per AB 80, California law conforms to the federal law regarding the treatment for an emergency Economic Injury Disaster Loan (EIDL) grant under the federal CARES Act or a targeted EIDL advance under the Consolidated Appropriations Act, 2021.

1. Page 2 of Pub. 3895B, column 2, Who Must File, paragraph 2.
2. Page 2 of Pub. 3895B, column 2, Who Must File, end of paragraph 4.
3. Page 3 of Pub. 3895B, column 1, Coverage Designated as MEC, item #3.

1 – 3.

Existing instructions modified.

1. Correcting the requirement for reporting catastrophic health plans.
2. Defining the Marketplace since the definition in an earlier paragraph has been deleted.
3. Adding clarifications that catastrophic health plans are minimum essential coverage.

1. Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).
2. Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).
3. Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).

1 – 3.

Under Line 8 – Other Income, f. Other (describe), first three paragraphs (above IRC Section 965 deferred foreign income paragraph).

1 – 3.

New line instructions added.

1.
H.R. 1319, the American Rescue Plan Act of 2021, provides for the exclusion of up to $10,200 of unemployment compensation for each taxpayer, if modified AGI is less than $150,000. For federal purposes, the income is excluded on Schedule 1 (Form 1040), line 8, Other income. For California purposes, all unemployment compensation is excluded from income on Schedule CA (540NR), line 7, Unemployment compensation, column B (Subtractions). Therefore, to prevent double exclusion of this income, the amount excluded for federal purposes is entered on Schedule CA (540NR), line 8f, Other, column C (Additions).

2.
SB 87, which chaptered on February 23, 2021, added Section 17158 to the California Revenue and Taxation Code. This bill provides that gross income does not include specified grant allocations, including grant allocations received by a taxpayer pursuant to a grant program funded by Executive Order No. E 20/21-182 and pursuant to the California Small Business COVID-19 Relief Grant Program established by Government Code Section 12100.83. If the grant allocations were included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540NR), line 8f, Other, column B (Subtractions).

3.
SB 91/AB 81, which chaptered on January 29, 2021, and February 23, 2021, respectively, provide that gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the federal Consolidated Appropriations Act, 2021. If the amount forgiven was included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540NR), line 8f, Other, column B (Subtractions).

1. Page 4 of 540NR booklet, column 1, 2020 Tax Law Changes/What’s New.
2. Page 4 of 540NR booklet, column 1, 2020 Tax Law Changes/What’s New.
3. Page 4 of 540NR booklet, column 1, 2020 Tax Law Changes/What’s New.
4. Page 44 of 540NR booklet/Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).
5. Page 44 of 540NR booklet/Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).
6. Page 44 of 540NR booklet/Page 6 of flat Sch. CA (540NR) instr., column 2, Line 8f Other (describe).

1 – 3.

Under Tax Law Changes/What’s New, first three paragraphs (above Dependent Exemption Credit with No ID paragraph).

4 – 6.

Under Line 8 – Other Income, f. Other (describe), first three paragraphs (above IRC Section 965 deferred foreign income paragraph).

1 – 3.

What's New paragraph added.

4 – 6.

New line instructions added.

1 & 4.
H.R. 1319, the American Rescue Plan Act of 2021, provides for the exclusion of up to $10,200 of unemployment compensation for each taxpayer, if modified AGI is less than $150,000. For federal purposes, the income is excluded on Schedule 1 (Form 1040), line 8, Other income. For California purposes, all unemployment compensation is excluded from income on Schedule CA (540NR), line 7, Unemployment compensation, column B (Subtractions). Therefore, to prevent double exclusion of this income, the amount excluded for federal purposes is entered on Schedule CA (540NR), line 8f, Other, column C (Additions).

2 & 5.
SB 87, which chaptered on February 23, 2021, added Section 17158 to the California Revenue and Taxation Code. This bill provides that gross income does not include specified grant allocations, including grant allocations received by a taxpayer pursuant to a grant program funded by Executive Order No. E 20/21-182 and pursuant to the California Small Business COVID-19 Relief Grant Program established by Government Code Section 12100.83. If the grant allocations were included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540NR), line 8f, Other, column B (Subtractions).

3 & 6.
SB 91/AB 81, which chaptered on January 29, 2021, and February 23, 2021, respectively, provide that gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the federal Consolidated Appropriations Act, 2021. If the amount forgiven was included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540NR), line 8f, Other, column B (Subtractions).

1. Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).
2. Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).
3. Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).

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1 – 3.

Under Line 8 – Other Income, f. Other (describe), first three paragraphs (above IRC Section 965 deferred foreign income paragraph).

1.
H.R. 1319, the American Rescue Plan Act of 2021, provides for the exclusion of up to $10,200 of unemployment compensation for each taxpayer, if modified AGI is less than $150,000. For federal purposes, the income is excluded on Schedule 1 (Form 1040), line 8, Other income. For California purposes, all unemployment compensation is excluded from income on Schedule CA (540), line 7, Unemployment compensation, column B (Subtractions). Therefore, to prevent double exclusion of this income, the amount excluded for federal purposes is entered on Schedule CA (540), line 8f, Other, column C (Additions).

2.
SB 87, which chaptered on February 23, 2021, added Section 17158 to the California Revenue and Taxation Code. This bill provides that gross income does not include specified grant allocations, including grant allocations received by a taxpayer pursuant to a grant program funded by Executive Order No. E 20/21-182 and pursuant to the California Small Business COVID-19 Relief Grant Program established by Government Code Section 12100.83. If the grant allocations were included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540), line 8f, Other, column B (Subtractions).

3.
SB 91/AB 81, which chaptered on January 29, 2021, and February 23, 2021, respectively, provide that gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the federal Consolidated Appropriations Act, 2021. If the amount forgiven was included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540), line 8f, Other, column B (Subtractions).

1. Page 4 of 540 booklet, column 1, 2020 Tax Law Changes/What’s New.
2. Page 4 of 540 booklet, column 1, 2020 Tax Law Changes/What’s New.
3. Page 4 of 540 booklet, column 1, 2020 Tax Law Changes/What’s New.
4. Page 44 of 540 booklet/Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).
5. Page 44 of 540 booklet/Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).
6. Page 44 of 540 booklet/Page 6 of flat Sch. CA (540) instr., column 1, Line 8f Other (describe).

1 – 3.

Under Tax Law Changes/What’s New, first three paragraphs (above Resident State Tax Filers List paragraph).

4 – 6.

Under Line 8 – Other Income, f. Other (describe), first three paragraphs (above IRC Section 965 deferred foreign income paragraph).

1 – 3.

What’s New paragraph added.

4 – 6.

New line instructions added.

1 & 4.
H.R. 1319, the American Rescue Plan Act of 2021, provides for the exclusion of up to $10,200 of unemployment compensation for each taxpayer, if modified AGI is less than $150,000. For federal purposes, the income is excluded on Schedule 1 (Form 1040), line 8, Other income. For California purposes, all unemployment compensation is excluded from income on Schedule CA (540), line 7, Unemployment compensation, column B (Subtractions). Therefore, to prevent double exclusion of this income, the amount excluded for federal purposes is entered on Schedule CA (540), line 8f, Other, column C (Additions).

2 & 5.
SB 87, which chaptered on February 23, 2021, added Section 17158 to the California Revenue and Taxation Code. This bill provides that gross income does not include specified grant allocations, including grant allocations received by a taxpayer pursuant to a grant program funded by Executive Order No. E 20/21-182 and pursuant to the California Small Business COVID-19 Relief Grant Program established by Government Code Section 12100.83. If the grant allocations were included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540), line 8f, Other, column B (Subtractions).

3 & 6.
SB 91/AB 81, which chaptered on January 29, 2021, and February 23, 2021, respectively, provide that gross income shall not include a tenant’s rent liability that is forgiven by a landlord or rent forgiveness provided through funds grantees received as a direct allocation from the Secretary of the Treasury based on the federal Consolidated Appropriations Act, 2021. If the amount forgiven was included in gross income for federal purposes, then an adjustment is needed to exclude the amount which is done on Schedule CA (540), line 8f, Other, column B (Subtractions).

1. Page 3, Column 1, What’s New, above first paragraph.
2. Page 18, Column 2, under “Income, Line 1 through Line 11c”, above “Line 10” paragraph.

1. Under “What’s New”, above first paragraph.
2. Under “Income, Line 1 through Line 11c”, above “Line 10” paragraph.

1. What’s New paragraph added.
2. New instructions added.

1. Page 3, Column 1, What’s New, above first paragraph.
2. Page 21, Column 1, under “Specific Line instructions, Line 1 through Line 11” and above “Line 1, column c” paragraph.

1. Under “What’s New”, above first paragraph.
2. Under “Specific Line instructions, Line 1 through Line 11” and above “Line 1, column c” paragraph.

1. What’s New paragraph added.
2. New instructions added.

1. 100 Booklet, Page 3, Column 1, What’s New/Tax Law Changes, First paragraph.
2. 100 Booklet, Page 16, Column 2, Specific Line Instructions, Line 15 – Other Deductions, Third Paragraph.

1. What’s New/Tax Law Changes, first paragraph.
2. Specific Line Instructions, Line 15 – Other Deductions, third paragraph.

1. Page 3, Column 1, What’s New/Tax Law Changes, First paragraph.
2. Page 18, Column 1, Line 12 – Other deductions.
3. Page 22, Column 3, Line 10b – Other income (loss).

1. Under “What’s New/Tax Law Changes”, First paragraph.
2. Under “Line 12 – Other deductions” (above the “Financial Incentive for Seismic Improvement” paragraph).
3. Under “Line 10b – Other income (loss)” (above the “Deductions” header).

1. What’s New/Tax Law Changes paragraph added.

2 – 3.

New line instructions added.

1. Form, Side 1, line 16.
2. Instructions, Line 16, after bulleted list.

1. New instructions added within existing instructions.
2. New instructions added following existing instructions.

1 – 2.
The reason for this revision is to add instructions for carryover excess business loss to clarify that the amount reported as an adjustment on the current year Schedule CA will only include the amount of excess business loss generated for the current year and does not include the excess business loss adjustment included as income from prior year.

1. Page 1 of the 541-QFT instructions, column 1, What's New.
2. Page 3 of the 541-QFT instructions, column 3, Credit name and form number (if any).

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1. Under "What's New" section, below the Program 3.0 California Motion Picture and Television Production Credit paragraph.
2. Under "Credit name and form number (if any)" section.

1. What's new paragraph modified.
2. Credit name modified.

1 – 2.
FTB's external partners have asked FTB and CDTFA to update references to the credit to consistently reflect the title to be, "Main Street Small Business Tax Credit"; SB 1447.

1. Side 3 of FTB 3805V, Part III, line 1.
2. Page 3 of FTB 3805V instructions, column 2, line 1, paragraph 2.
3. Page 5 of FTB 3805V instructions, NOL Carryover Table, Type of NOL and Description, row 1.

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1. N/A
2. Under “Specific Line Instructions”, “Part III – Limitations”, Line 1 instructions, paragraph 2.
3. Under “Specific Line Instructions”, NOL Carryover Table, immediately underneath “NOL Carryover”, Note paragraph.

1. Existing line instructions modified.
2. Existing line instructions modified.
3. Existing instructions modified.

1. Page 3, Column 1, What’s New/Tax Changes, First Paragraph.
2. Page 15, Column 3, Specific Line Instructions, Line 8 – Other Additions.

1. What’s new paragraph modified.
2. New line instructions added.

1 – 2.
California does not conform to the federal Consolidated Appropriations Act, 2021 with regard to the deductibility of eligible expenses under the Paycheck Protection Program (PPP). As a result, adjustments may be needed for eligible expenses under the PPP.

1. What’s new paragraph modified.
2. New line instructions added.

1 – 2.
California does not conform to the federal Consolidated Appropriations Act, 2021 with regard to the deductibility of eligible expenses under the Paycheck Protection Program (PPP). As a result, adjustments may be needed for eligible expenses under the PPP.

1. Page 3, Column 1, What’s New/Tax Law Changes, First paragraph.
2. Page 17, Column 2, Line 7 – Other additions.
3. Page 21, Column 3, Schedule K and Schedule K-1 (100S).

1. What’s New/Tax Law Changes paragraph modified.
2. New line instructions added.
3. New instructions added to the Schedule K and Schedule K-1 (100S).

1 – 3.
California does not conform to the federal Consolidated Appropriations Act, 2021 with regard to the deductibility of eligible expenses under the Paycheck Protection Program (PPP). As a result, adjustments may be needed for eligible expenses under the PPP.

1. Page 4, of 540NR booklet, column 1, 2020 Tax Law Changes/What's new.
2. Page 39 of 540NR booklet/Page 1 of flat Sch. CA (540NR) instr., column 1, What’s new.
3. Page 43 of 540NR booklet/Page 5 of flat Sch. CA (540NR) instr., column 1, Line 3 – Business Income or (Loss).
4. Page 40 of 540NR booklet/Page 2 of flat Sch. CA (540NR) instr., column 2, Line 22.
5. Page 46 of 540NR booklet/Page 8 of flat Sch. CA (540NR) instr., column 1, Line 22.
6. Page 48 of 540NR booklet/Page 10 of flat Sch. CA (540NR) instr., column 2, Line 11 – Gifts By Cash or Check.

1 – 3.
California does not conform to the federal Consolidated Appropriations Act, 2021 with regard to the deductibility of eligible expenses under the Paycheck Protection Program (PPP). As a result, adjustments may be needed for eligible expenses under the PPP.

4 – 6.
The charitable contribution is not a part of the standard deduction.

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Page 3 of 541 booklet, Column 1, What's New.

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Under "What's New" section, between New Donated Fresh Fruits or Vegetables Credit and Main Street Small Business Tax Credit paragraphs.

1. Column 2, 2020 Tax Law Changes/What’s new.
2. Page 39/Page 1 of flat Sch. CA (540) instr., column 1, What’s new.
3. Page 42/Page 4 of flat Sch. CA (540) instr., column 2, Line 3 – Business Income or (Loss).
4. Page 40/Page 2 of flat Sch. CA (540) instr., column 2, Line 22.
5. Page 46/Page 8 of flat Sch. CA (540) instr., column 1, Line 22.
6. Page 47/Page 9 of flat Sch. CA (540) instr., column 1, Line 11 – Gifts By Cash or Check.

1. What’s new paragraph modified.
2. New line instructions added.
3. Existing instructions modified.
4. Existing instructions modified.
5. Existing instructions modified.
6. Existing instructions modified.

1 – 3.
California does not conform to the federal Consolidated Appropriations Act, 2021 with regard to the deductibility of eligible expenses under the Paycheck Protection Program (PPP). As a result, adjustments may be needed for eligible expenses under the PPP.

4 – 6.
The charitable contribution is not a part of the standard deduction.

1. Page 3, column 1, immediately under What’s New section title.
2. Page 14, immediately under Other Income/Loss section title.

1. We added new instructions.
2. We added new instructions.

The following bills were chaptered on September 29, 2022, and they provide an exclusion from gross income for California purposes as follows:

• AB 1249, for taxable years beginning before January 1, 2028, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement from the Fire Victims Trust.
• SB 1246, for taxable years beginning before January 1, 2027, provides an exclusion from gross income for any qualified taxpayer for amounts received in settlement for claims associated with the 2017 Thomas Fire and the 2018 Woolsey Fire.

Since federal law has no similar exclusion for those provisions above, an adjustment is needed on Schedule CA (540 or 540NR) and on applicable tax return for each one of those items.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 75 of 540 booklet, column 2, Step 5, Line 13.
2. Page 75 of 540 booklet, column 2, Step 5, Line 14.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 69 of 540NR booklet, column 2, Step 5, Line 13.
2. Page 69 of 540NR booklet, column 2, Step 5, Line 14.

Page 8, Business Income or (Loss) – Depreciation, Amortization, and Property Expensing, Columns 1 – 3.

New text to follow after the bullet for MACRS recovery period for nonresidential real property.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 13.
2. Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 14.

1 – 2.
Modified existing instructions.

1. FTB 3514 instructions (HTML), Line 13 instructions, first paragraph.
2. FTB 3514 instructions (HTML), Line 14 instructions, first paragraph.

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1. Page 25 of 540 2EZ booklet, column 2, Step 5, Line 13.
2. Page 25 of 540 2EZ booklet, column 2, Step 5, Line 14.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 73 of 540 booklet, column 2, Step 5, Line 13.
2. Page 73 of 540 booklet, column 2, Step 5, Line 14.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 73 of 540NR booklet, column 2, Step 5, Line 13.
2. Page 73 of 540NR booklet, column 2, Step 5, Line 14.

Page 8, Business Income or (Loss) – Depreciation, Amortization, and Property Expensing, Columns 1 – 3.

New text to follow after the bullet for MACRS recovery period for nonresidential real property.

1. Line 13 instructions, first paragraph.
2. Line 14 instructions, first paragraph.

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1. Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 13.
2. Page 3 of flat FTB 3514 instructions, column 2, Step 5, Line 14.

1 – 2.
Modified existing instructions.

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Page: 38
Column: 2
Line: 13d

The miscellaneous itemized deduction subject to the 2% of federal AGI is no longer allowed at the federal level. However, California allows the miscellaneous itemized deduction subject to the 2% of federal AGI. Miscellaneous deductions from pass-through entities are subject to the 2% of federal AGI.

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FTB 3514 instructions (HTML), Line 13 instructions, first paragraph.

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Page 27 of 540 2EZ booklet, column 2, Step 5, Line 13.

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Page 75 of 540 booklet, column 2, Step 5, Line 13.

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Page 71 of 540NR booklet, column 2, Step 5, Line 13.

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Page 3 of flat FTB 3514 instructions, Column 2 Step 5, Line 13.