Taxation: credit: savings plans: qualified ABLE program: small business cash method of accounting.

Existing federal law, the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (ABLE Act) , for taxable years beginning on or after January 1, 2014, encourages and assists individuals and families to save private funds for the purpose of supporting persons with disabilities to maintain their health, independence, and quality of life by excluding from gross income distributions used for qualified disability expenses by a beneficiary of a Qualified ABLE Program established and maintained by a state, as specified. Existing federal law, the Tax Cuts and Jobs Act, increases the amount of contributions allowed to an ABLE account, adds special rules for the increased contribution limit, and exempts from taxation distributions from a qualified tuition program, as defined, rolled into an ABLE account. Existing federal law additionally allows a "savers tax credit" to qualified taxpayers for qualified retirement savings contributions, defined to include contributions by the taxpayer to their ABLE account. Existing law, the Personal Income Tax Law and the Corporation Tax Law, for taxable years beginning on or after January 1, 2016, conforms to these federal income tax law provisions relating to the ABLE Act, as provided. Existing law creates the ABLE Act Board and requires the board to provide an annual listing of distributions to individuals that have an interest in an ABLE account to the Franchise Tax Board, as provided. This bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2026, would conform to those changes made by the Tax Cuts and Jobs Act. The bill, for taxable years beginning on or after January 1, 2020, and before January 1, 2026, would, in partial conformity with the federal "savers tax credit," allow a credit for qualified retirement savings contributions to ABLE accounts. Existing federal law, the Tax Cuts and Jobs Act, allows a small business to use the cash method of accounting if its average annual gross receipts for the 3 taxable years ending with the prior taxable year do not exceed $25,000,000. Existing state law, the Corporation Tax Law, allows a small business to use the cash method of accounting if its average annual gross receipts for the 3 taxable years ending with the prior taxable year do not exceed $5,000,000. This bill, for taxable years beginning on or after January 1, 2020, would conform the Corporation Tax Law to the change made by the Tax Cuts and Jobs Act that increased the allowable amount of annual gross receipts to $25,000,000 for a small business to use the cash method of accounting. This bill would take effect immediately as a tax levy.