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Justin Hepworth

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Justin Hepworth is a partner in the Tax and Estate Planning Practice Group in the firm's Orange County office.

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On April 29, 2021 Governor Newsom signed California A.B. 80, largely conforming to Federal rules relating to deductibility of expenses paid with funds from forgiven Paycheck Protection Program (PPP) loans.  The $150,000 limitation in prior versions of A.B. 80 was removed, and replaced with a requirement that only non-publicly traded companies who reported losses of at least 25% in gross receipts during one quarter of 2020 can deduct such expenses.  That 25% decrease in gross receipts was also a condition for receiving a PPP loan in the second round of loans made available in late 2020.  Publicly traded companies cannot deduct any amount of expenses paid with funds from forgiven PPP loans.
Continue Reading California Largely (But Not Fully) Conforms to Deductibility of Expenses Paid with Forgiven PPP Loans

As reported in our earlier blog post The CARES ACT – Tax Relief, the federal CARES Act provides for forgiveness of indebtedness for eligible recipients of Paycheck Protection Program (“PPP”) loans in an amount equal to the sum of the recipient’s payroll costs, interest on mortgage obligations, rent obligations and utility payments (subject to certain conditions and limitations).  Under federal law, any amount of covered loans forgiven under the CARES Act is excluded from gross income for federal income tax purposes.
Continue Reading California Conforms To Federal Income Tax Treatment Of PPP Loan Forgiveness