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The PPPEA extends the covered period of the PPP to June 30, 2021. California law conforms to this extension and allows an exclusion from gross income for PPP loans made during the extended covered period after March 31, 2021 through June 30, 2021.
California conforms to the federal gross receipts test requiring a 25% or greater reduction in gross receipts and will therefore follow the rationale of this related federal guidance.
18 maj 2021 · In particular, California’s definition of an “ineligible entity” borrows its 25% diminution in gross receipts test from the qualification (i.e. eligibility) criteria for receiving a second draw PPP loan for federal income tax purposes under the CAA. 13 Although this requirement only applied to second draw PPP loans for federal income tax ...
13 maj 2021 · Only a gross receipts reduction in one quarter in 2020 must meet this 25% threshold to qualify for the PPP loan expense deduction, assuming the entity is not publicly traded. A taxpayer cannot combine two or more 2020 quarterly losses to arrive at this threshold.
“Ineligible entity” is defined to mean a taxpayer that either is a “publicly-traded company,” or “does not meet the reduction from the gross receipts requirements of Section 636(a)(37)(A)(iv)(bb) of Title 15 of the United States Code, as added by Section 311 of Division N of the [CCA]” which generally applies to taxpayers that did not experience...
13 maj 2021 · The current guidance provided for federal income tax purposes requires a gross receipts reduction of at least 25% to be eligible for a deduction of the expenses paid only with the second-draw PPP loan that is forgiven.
FTB has received several questions recently regarding the deductibility of expenses paid with Paycheck Protection Program (PPP) loan proceeds when the loan has been forgiven, and whether the amount of the loan that has been forgiven enters into the calculation of the LLC fee.
