Retroactive California TCJA elections - Spidell

Retroactive California TCJA elections

The Governor recently signed legislation that, among other things, conforms to the small business accounting and partnership termination provisions of TCJA effective January 1, 2019. (AB 91 (Ch. 19-30)) However, the legislation allows a taxpayer to retroactively conform to these two provisions for years beginning on or after January 1, 2018.

The law was just enacted, so formal procedures have not been established for either election.

However, according to the FTB, until formal procedures have been adopted, taxpayers may make a retroactive partnership termination election by:

  • Including a statement with their original or amended California tax return, for the appropriate tax year, stating the taxpayers’ intent to make an election under Section 16(d)(1) of AB 91; and
  • Writing “AB 91 – Section 16 Election” in blue ink on the top of each page of the original or amended tax return; and
  • Mailing all “AB 91 – Section 16 Election” returns to:

Franchise Tax Board
P.O. Box 1570
Rancho Cordova, CA 95741-1570

The returns may not be e-filed.

When the FTB issues formal guidance and information on making the small business accounting election we will provide updated or finalized procedures.

In the upcoming issue of Spidell’s California Taxletter®, we will discuss the provisions in more detail and will report on additional guidance as it becomes available.

But until then, go ahead and start filing these returns.

Attend Spidell’s Federal and California Tax Update Seminar and be ready for tax season in just one day. Click here for more information, or see below for a list of locations.

Northern Locations
Southern Locations
Seminar time: 8:30 a.m. to 4:45 p.m.


Webinar 1
Dec. 9—10 (Monday and Tuesday)
8:30 a.m. to noon PT
Webinar 2
Jan. 16—17 (Thursday and Friday)
8:30 a.m. to noon PT
On-Demand Webinar
Available by Dec. 17
Print and Online versions available December 1, 2019