2020-59: AB 5 and COVID-19 retirement plan loan conformity bills sent to Governor - Spidell

2020-59: AB 5 and COVID-19 retirement plan loan conformity bills sent to Governor


Dozens of tax-related bills were sent to the Governor’s desk on the last day of the 2020 California General Assembly’s session, including:

  • AB 323 and AB 2257: These are the AB 5 cleanup bills that expand upon current exemptions from AB 5’s ABC employee classification test, including:
    • New exemptions for music and entertainment industry professionals;
    • Expanded exemptions for newspaper carriers, journalists, photographers, and other content creators; and
    • The easing of the requirements to qualify for the business-to-business exemption and the referral agency exemptions.
      The law also states that an employee for payroll tax purposes under AB 5 is also an employee for income tax filing purposes. Absent from the bill is any mention or exemption for Uber/Lyft or other transportation or delivery workers.
  • AB 276: This bill conforms to the CARES Act provision that increases the amount of loans that may be taken from qualified plans from $50,000 to $100,000 without the withdrawal being considered a taxable distribution.

The Governor is expected to sign these bills.

We will discuss details of these bills and how to compute individual income tax returns for affected workers at Spidell’s AB 5 Update: Legislation and Audits webinar. Click here to register.

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