BPM Tax Partner Tony Gales provides an overview of the nuances that taxpayers should be aware of
California State’s legislature passed Assembly Bill (AB) 150 in July 2021 by a broad bi-partisan majority. The California Franchise Tax Board (FTB) states that for taxable years beginning on or after January 1, 2021, and before January 1, 2026, qualifying pass-through entities (PTEs), which are usually partnerships or S corporations, may annually elect to pay an entity-level state tax on behalf of its members. Qualified taxpayers receive a credit for their share of the entity level tax, reducing their California personal income tax.
“The law has only been on the books for one tax season and with the 2022 filing year upon us, it is important that California entities, owners and their preparers be cognizant of the many issues that can affect their PTE tax credit,” BPM Partner Tony Gales explains in his article on Accounting Today.
About Tony Gales
Tony Gales, CPA, has nearly 30 years of public accounting experience and is a Tax Partner in BPM’s Long Beach office. He helps untangle the intricacies of federal tax laws to uncover and plan for tax opportunities that clients can use to achieve their financial goals.