Is there a latest update on the CA PTE tax credit limitation due to AMTI? Form FTB 3804-CR says that this credit cannot reduce the AMT, and it cannot reduce regular tax below tentative minimum tax. Is this the final rule?
The Governor today signed SB 113, which expands the passthrough entity elective tax benefits by:
Repealing the tentative minimum tax limitation on the Passthrough Entity 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 SMLLCs that are passthrough entity owners to claim the Passthrough Entity Elective Tax Credit (although SMLLCs are still prohibited from making the election themselves); and
Changing the credit ordering rules related to the Passthrough Entity Elective Tax Credit to increase the benefit for taxpayers that claim the Other State Tax Credit (beginning with the 2022 tax year).
Except as noted, these changes will apply to the 2021 tax year.
SB 113 also:
Fully conforms to the federal exclusion of Restaurant Revitalization Grants, retroactive to the 2020 tax year;
Partially conforms to the federal exclusion of Shuttered Venue Operator Grants, retroactive to the beginning of the 2019 tax year; and
Repeals the $5 million business credit limitation and NOL suspension for higher income taxpayers for the 2022 taxable year.
The Governor also signed SB 114, which requires employers with more than 25 employees to provide up to 80 hours of COVID-19–related paid supplemental sick and family leave, retroactive to January 1, 2022, through September 30, 2022. There are no provisions that provide tax benefits or credits to employers who provide the supplemental paid leave.
The Governor today signed SB 113, which expands the passthrough entity elective tax benefits by:
Repealing the tentative minimum tax limitation on the Passthrough Entity 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 SMLLCs that are passthrough entity owners to claim the Passthrough Entity Elective Tax Credit (although SMLLCs are still prohibited from making the election themselves); and
Changing the credit ordering rules related to the Passthrough Entity Elective Tax Credit to increase the benefit for taxpayers that claim the Other State Tax Credit (beginning with the 2022 tax year).
Except as noted, these changes will apply to the 2021 tax year.
SB 113 also:
Fully conforms to the federal exclusion of Restaurant Revitalization Grants, retroactive to the 2020 tax year;
Partially conforms to the federal exclusion of Shuttered Venue Operator Grants, retroactive to the beginning of the 2019 tax year; and
Repeals the $5 million business credit limitation and NOL suspension for higher income taxpayers for the 2022 taxable year.
The Governor also signed SB 114, which requires employers with more than 25 employees to provide up to 80 hours of COVID-19–related paid supplemental sick and family leave, retroactive to January 1, 2022, through September 30, 2022. There are no provisions that provide tax benefits or credits to employers who provide the supplemental paid leave.
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