The legislation, which passed through the California Legislature with unanimous support, put California in conformity with provisions in the federal CARES Act.
Governor Newsom's signature on Assembly Bill 276 (Friedman), a bill eliminating a potential tax trap for Californians needing to borrow from their employer-sponsored retirement plan during the COVID-19 pandemic, was heralded by the Entertainment Union Coalition (EUC), comprised of the California IATSE Council, Laborers Local 724, Teamsters Local 399 and SAG AFTRA.
"In these difficult times, our members across California need access to their retirement funds to support themselves and their families during the current COVID Pandemic. AB 276 will allow them to do that without incurring a penalty or unintended income tax payments," a statement from the EUC said. "We thank the Governor and the bill's author, Assembly Member Laura Friedman, for their support of working people statewide. We are glad that our concern for our members has led to protection for working women and men in similar circumstances throughout the State." The legislation, which passed through the California Legislature with unanimous support, put California in conformity with provisions in the federal Coronavirus Aid, Relief and Economic Security (CARES) Act which removes penalties and improves access for those needing to take a loan from their employer-sponsored defined contribution plan. While California automatically conformed to some provisions of the CARES Act, it did not with others, creating the possibility that Californians taking a loan from their qualified retirement plan that met the requirements of the CARES Act could find themselves facing a tax penalty and unintended tax consequences for California state purposes. AB 276 rectifies that situation by fully conforming California law to the CARES Act with regard to the tax treatment of such loans.Videos