CA - IRC Conformity Date

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CA – IRC Conformity Date

State Tax conformity means that a state “conforms” or abides by the federal tax code as it relates to tax concepts and definitions of income. This is applicable to both businesses and individuals.

Most states conform in some manner, but to varying degrees. There is automatic or “moving date” conformity, which means that changes in federal tax law automatically apply to the state tax code as they occur. Another scenario is “fixed date” conformity, meaning that a state conforms to the federal code as it existed on a certain date. For example, if a state conformed as of January 1, 2001 it would mean that the state does not automatically incorporate federal tax law changes occurring after that date.

California is a “fixed date” conformity state. Currently this “fixed date” is January 1st, 2005. Cal. Assembly Bill 115, signed by Gov. Schwarzenegger on 10/7/2005.

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