California conformity to OBBBA §199A permanent extension — what's the FTB position?
The federal One Big Beautiful Bill Act made §199A permanent. California has never conformed to federal QBI — the CA addition on Schedule CA(540) adds back the federal §199A deduction for CA taxable income purposes.
With OBBBA extending §199A indefinitely, i want to confirm FTB hasn't quietly conformed or introduced its own analog. Latest guidance i can find says CA conformity date is still Jan 1 2015 + selective updates.
Anyone aware of a 2025 FTB position change on §199A conformity? Or can confirm the addback on Schedule CA(540) Part I Line 3 still applies?
2 replies
Found it — FTB Notice 2025-03 (issued January) explicitly states California does NOT conform to the OBBBA §199A permanent extension. The §199A deduction must still be added back on Schedule CA(540) Line 3c.
So: client's federal return uses full §199A, California return adds it back. standard treatment, just wanted to flag in case anyone was assuming conformity.
CA is consistent on this — they've never conformed to §199A and OBBBA doesn't change their position. the addback is permanent unless the legislature acts, which they won't.
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