§ 17551. — 17551. (Amended by Stats. 2025, Ch. 231, Sec. 52.)

California § 17551.

• Jurisdiction: California
• Code RTC: Revenue and Taxation Code - RTC
• Div. 2.: DIVISION 2. OTHER TAXES
• Part 10.: PART 10. PERSONAL INCOME TAX
• Ch. 6.: CHAPTER 6. Accounting Periods and Methods of Accounting

Text

(a)
Subchapter E of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to accounting periods and methods of accounting, shall apply, except as otherwise provided.
(b)
Section 444(c)(1) of the Internal Revenue Code, relating to effect of election, shall not apply.
(c)
Section 451(b) of the Internal Revenue Code, relating to inclusion not later than for financial accounting purposes, shall not apply to specified credit card fees, as defined in Treasury Regulations Section 1.451-3(j)(2).
(d)
(1)
Notwithstanding the specified date
contained in paragraph (1) of subdivision (a) of Section 17024.5, Section 457 of the Internal Revenue Code, relating to deferred compensation plans of state and local governments and tax-exempt organizations, shall apply, except as otherwise provided, without regard to taxable year to the same extent as applicable for federal income tax purposes.
(2)
The maximum deferred compensation for the taxable year that may be excluded from gross income under Section 457 of the Internal Revenue Code, as applicable for state purposes, shall not exceed the amount of deferred compensation that may be excluded from gross income under Section 457 of the Internal Revenue Code, as in effect on January 1, 2010, including additional elective deferrals under Section 414(v) of the Internal Revenue Code, as in effect on January 1, 2010.
(e)
(1)
For taxable years beginning on or after January 1, 2002, the basis of any person in the plan shall be increased by the amount of compensation not allowed to be excluded under subdivision (a).
(2)
Any basis described in paragraph (1) shall be recovered in the manner specified in Section 17085.
(f)
Notwithstanding the limitations provided in subdivision (a), any income attributable to compensation deferred in a plan in taxable years beginning on or after January 1, 2002, in conformance with Section 457 of the Internal Revenue Code, as applicable for federal and state purposes, shall not be includable in the gross income of the individual for whose benefit the plan was established until distributed
pursuant to the provisions of the plan or by operation of law.
(g)
Section 451(k) of the Internal Revenue Code, relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy, shall not apply.
(h)
Section 457A of the Internal Revenue Code, relating to nonqualified deferred compensation from certain tax indifferent parties, shall not apply.

Legislative History

Amended by Stats. 2025, Ch. 231, Sec. 52. (SB 711) Effective October 1, 2025.