2019-25: How to make a retroactive small business accounting election - Spidell

2019-25: How to make a retroactive small business accounting election

The FTB has released preliminary guidance on how to make the small business accounting election on the 2018 tax return.

California conforms to the small business accounting provisions of the TCJA for years beginning January 1, 2019. However, taxpayers may make an election to conform to federal law in this area for years beginning on or after January 1, 2018.

Until formal procedures have been adopted and communicated, taxpayers may make the election by providing the following information to the FTB:

  1. Include a statement with their original or amended California tax return, for the appropriate tax year, stating the taxpayer’s intent to make a small business accounting election and which election(s) they are making;
  2. On the top of the first page of the original or amended tax return, write “AB 91 – Small Business Accounting Election” in blue ink; and
  3. Mail all “AB 91 – Small Business Accounting Election” returns to:
    Franchise Tax Board
    PO Box 942857
    Sacramento, CA 94257-0500

Note: You must paper-file these returns.

For more information about making the retroactive election for partnership terminations, see our Flash E-mail from July 19, 2019:


We will have more details in the September issue of Spidell’s California Taxletter. Don’t miss out! Click here and subscribe today.