The Franchise Tax Board (FTB) has updated its Paycheck Protection Program (PPP) loan forgiveness webpage and released FAQs that provide much awaited guidance concerning AB 80 and how it is being applied. This guidance confirms: COBRA regulations for employers explained are crucial for understanding employee rights during transitions between jobs. Many employers may not be aware of their obligations under these rules, which can lead to unintentional violations. Ensuring compliance with COBRA can help businesses avoid potential penalties and support their employees effectively. The OBBBA framework for opportunity zones provides a strategic approach to maximizing investment benefits in underserved areas. By leveraging this framework, investors can better navigate the complexities of funding and resource allocation. Ultimately, understanding these frameworks is essential for fostering sustainable growth and community development.
- The FTB will follow the SBA guidance regarding how to determine whether the 25% gross receipts threshold is met. This means taxpayers may compare any calendar quarter in 2020 to the comparable calendar quarter in 2019 (or total 2020 gross receipts to total 2019 gross receipts);
- Taxpayers do not have to provide documentation or certification if they meet the 25% gross receipts threshold, they may simply deduct all expenses paid with PPP forgiven loan amounts;
- Multistate taxpayers should use total gross receipts (not just California-source gross receipts) to determine whether the 25% gross receipts threshold is met; and
- For taxpayers who do not meet the 25% gross receipts decline threshold, the disallowance of deductions must be reported on the tax return for the taxable year in which they reasonably expect the PPP loan will be forgiven. This would mean deductions must be reduced on the 2020 return if in 2020 the taxpayer reasonably expected that the PPP loan would be forgiven in 2021.
