How SB 711 Impacts Your California Taxes

When it comes to California taxes, “conformity” to the federal Internal Revenue Code (IRC) does not always mean alignment. This can create big surprises for taxpayers. With the passage of Senate Bill 711, California has officially updated its conformity date to January 1, 2025. This means the state will now recognize most federal tax provisions that were in effect as of that date but not all of them.

At Wilson Tax Law Group, APLC, we are closely monitoring these changes because the gap between state and federal law is one of the most common causes of confusion, compliance errors, and unexpected tax bills for our clients.

What’s Changing

Previously, California’s conformity date lagged years behind federal law, meaning many federal updates never flowed through to California tax returns. Senate Bill 711 moves that benchmark forward, aligning California with a much more current version of the IRC. This is good news for California taxpayers, particularly those who claimed recent federal deductions or credits that were disallowed at the state level.

However, full conformity does not occur automatically. California is considered a “fixed-date” conformity state and generally has decoupled from many significant federal tax provisions enacted after its specified conformity date (this was recently updated to January 1, 2025 for tax years beginning on or after January 1, 2025). Some of those provisions include bonus depreciation and Section 179 expensing limits, qualified business income (QBI) deductions under IRC § 199A, certain opportunity-zone and clean energy provisions, etc.

Suggested year-end preparations

Review your 2024 and 2025 filing side-by-side. Make sure any carryovers, depreciation schedules, or credit calculations align with California’s updated rules.

Confirm withholdings and estimated payments. If your federal taxable income changes under the new conformity date, your state liability may shift too.

Evaluate business and investment structures. The new conformity date could affect pass-through entities, deferred compensation, and opportunity-zone timing decisions.

Why a Tax Attorney Can Help

California’s partial conformity system often leads to complex reconciliations and audit exposure. A seasoned tax attorney can interpret which provisions truly apply to your situation, amend prior returns if needed, and communicate directly with the Franchise Tax Board or IRS if questions arise. At Wilson Tax Law Group, APLC, we help individuals, professionals, and business owners navigate these nuanced updates, so your year-end planning is proactive, not reactive. Do not let new rules catch you off guard. Turn tax uncertainty into opportunity with trusted legal insight.

If you have any questions regarding your individual or businesses’ state and/or federal tax return(s)/tax liabilities or received a notice from the IRS, FTB, EDD, CDTFA or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.