CATEGORY:
Client Update for Public Agencies, Fire Watch, Law Enforcement Briefing Room, Nonprofit News, Private Education Matters, Public Education Matters
CLIENT TYPE:
Nonprofit, Private Education, Public Education, Public Employers, Public Safety
DATE: Oct 26, 2020
This bill brings California’s tax treatment of retirement account loans in line with the federal Coronavirus Aid, Relief and Economic Security Act (CARES Act). The CARES Act was an economic relief package passed by Congress and signed into law by President Trump in March. The economic relief package includes many provisions to help Americans with the economic impacts of the COVID-19 pandemic. One such provision allows qualified borrowers impacted by COVID-19 to borrow up to $100,000 from qualified employer retirement plans (such as 401(k), 403(b), 457(b), or 401(a) plans), without facing a federal income tax penalty. This is an increase from the standard limit of $50,000. This bill applies these same rules to California’s personal income tax laws, allowing qualified borrowers impacted by COVID-19 to borrow up to $100,000 from a qualified employer retirement plans without facing an adverse tax penalty under state law.
(AB 276 amends Section 17085 of the Revenue and Taxation Code.)
