New Restrictive California Tax Provisions Part of Recent California Budget
Highlights
California law now restricts taxpayers with more than $1 million in income from claiming a California net operating loss deduction for the tax years 2024 to 2026
Net business tax credits used to offset California tax liabilities cannot exceed $5 million for the tax years 2024 to 2026; however, some credits may be eligible for a partial refund
Businesses with income excluded from taxable income must also exclude that income from the apportionment formula when calculating income attributed to California
California has officially enacted budget legislation that includes important California state tax provisions, including for net operating losses (NOLs) and credit limitations, apportionment for deductible income, and eliminating the sales tax bad debt deduction for certain non-retailers.
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