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2023 Updates: Taxes & California Privacy Rights Act
 

Pandemic Tax Relief Is Still Available, But It’s Going Fast

Employee Retention Tax Credit
The Employee Retention Tax Credit (“ERTC”) program is the last major pandemic financial relief program for small businesses to receive stimulus money due to the pandemic. The IRS is still giving funds to business owners, up to $26,000 per employee, for payroll paid in 2020 and 2021. Even businesses which took PPP loans are eligible, but time is running out as these claims must be filed within three years of filing the original payroll returns to qualify.

For further information regarding the Employee Retention Tax Credit, please visit: https://www.irs.gov/newsroom/employee-retention-credit-2020-vs-2021-comparison-chart

Child Tax Credits
Gone is the increased child tax credit, which provided as much as $3,600 per child in 2021. In 2022, the credit returned to a maximum of $2,000 per child for eligible families. As a result of this change, a family with two children that would have received as much as $7,200 in 2021 will claim, at most, $4,000 in 2022. 

For further information regarding 2022 Child Tax Credit, please visit:  https://www.irs.gov/credits-deductions/individuals/child-tax-credit

New Tax Credits and Incentives for 2023


Tax Credit for Electric Vehicles
If you buy a new plug-in electric vehicle in 2023 or after, you may qualify for a $7,500 clean vehicle tax credit. The credit is available to individuals and their businesses if your modified adjusted gross income is $300,000 or less for married couples filing jointly, $225,000 or less for heads of households, or $150,000 or less for single filers. 
 
In addition, beginning January 1, 2023, if you buy an eligible used electric vehicle from a licensed dealer for $25,000 or less, you may qualify for a used clean vehicle tax credit. The credit equals 30% of the sale price up to a maximum credit of $4,000. 
 
For more information regarding tax credits for electric vehicles, please visit: https://www.irs.gov/credits-deductions/credits-for-new-clean-vehicles-purchased-in-2023-or-after

Tax Credit for Clean Energy
The Inflation Reduction Act recently increased and extended the solar tax credit, which offers homeowners and businesses a tax credit worth 30% of their total solar panel installation costs. This credit can be rolled over to future tax years if the credit exceeds your tax liability. 

For more information regarding tax credits for clean energy, please visit: https://www.irs.gov/instructions/i5695

Tax Deduction for Energy Efficient Commercial Buildings
For buildings placed into service in 2023 or later, taxpayers can claim a deduction of up to $5 per square foot for structures that qualify as energy-efficient buildings under the expanded IRC Section 179D. The deduction is calculated on a sliding scale from 25% to 50%, with $5 per square foot being available at a calculated 50% reduction in energy costs per year. 

For more information regarding tax deductions for energy-efficient commercial buildings, please visit: https://www.law.cornell.edu/uscode/text/26/179D 

California Abolishes the “Pink Tax”
California retailers may no longer charge more for products marketed to women if those products are identical or “substantially similar” to lower-priced men’s products, which is often the case for shampoos, deodorants, and razors. The bill defines “substantially similar” as two goods with the following characteristics: 
  • No substantial differences in the materials used in production; 
  • The intended use is similar; 
  • The functional design and features are identical; or
  • The brand is the same or the same individual or entity owns both brands.
For more information regarding the abolishment of the “Pink Tax”, please visit: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB1287

Property Tax Reassessment After a Decline in Value
Many property owners who purchased property at the top of the market may be eligible for a property tax reduction this year. Because property taxes are based on property value, property owners may ask their county assessor to reduce the assessed tax if a property’s value has declined. The request should include an informal assessment or appraisal review form with data to support a claim that the property’s value is lower than its assessed value. 

The county assessor’s staff will then review this information and may agree with the information submitted. However, if a difference of opinion regarding value still exists after reviewing pertinent information, the taxpayer may appeal the assessed value to the county assessment appeals board by filing form BOE-305-AH with the panel clerk where the property is located. 

For more information regarding property tax reductions for declined property values, please visit: https://www.boe.ca.gov/info/AssessmentVideo/Index.html and/or https://www.boe.ca.gov/proptaxes/pdf/pub30.pdf

Updates to the California Privacy Rights Act

Effective in 2023, the California Privacy Rights Act (“CPRA”) amends and extends the California Consumer Privacy Act of 2018 (“CCPA”) by increasing consumers’ ability to obtain, delete, correct, and prevent the sale of their own information. Businesses may now only use a consumer’s information for a stated purpose, they must be able to tell consumers to whom the personal data was sold, and businesses must delete consumer information when a deletion request is received. 

For more information regarding updates to the California Privacy Rights Act, please visit: https://www.caprivacy.org/cpra-text/

For further assistance or information regarding the above updates or any other tax-related issues, please contact MOBO Law, LLP at (530) 214-8700.

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