California IRA Contribution Conformity - Spidell

California IRA Contribution Conformity

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Message Board California IRA Contribution Conformity

  • This topic has 2 replies, 2 voices, and was last updated 1 week, 1 day ago by Mark Bole.
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    • #275666
      Lawrence Rogers
      Participant

      The IRS I believe in the Secure Act allowed taxpayers turning 70 1/2 and older in 2020 to continue to make IRA Contributions to traditional IRAs.  Did California ever conform or is that a CA adjustment for 2020 to be counted as an non deductible contribution requiring basis tracking?

    • #275676
      Mark Bole
      Participant

      I don’t know about CA conformity (probably it does conform).  However, if CA does not conform, it would be an excess contribution to an IRA.  CA does not conform to the federal tax on excess contributions (6%), so in the end I suppose it would be a “non deductible contribution requiring basis tracking”, but only because of CA non-conformity to the excess contributions penalty, not because it is an allowed contribution.

      Speaking of which I still want to know how/why CA conforms to the CARES Act provision about the special coronavirus-related IRA distributions in 2020 (spread tax over 3 years, payback allowed).  I previously pointed out here that the section of the CARES Act which allows this for federal does not amend or modify the IRC, so why would there be automatic conformity?  Spidell has done some hand waving and says “yes of course there is conformity, read our  newsletter”.  I asked if the legal analysis would be included in the annual tax update seminar, no answer.

    • #275677
      Mark Bole
      Participant

      Here is the thread asking how CA automatically conforms.

      California conformity to Coronavirus Related Distributions (CRDs)

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