California Non-Conformity to the One Big Beautiful Bill Act (OBBBA)
- Viktoriya Barsukova, EA, MBA
- Jul 27
- 2 min read
Because California only currently conforms to the Internal Revenue Code as in effect on January 1, 2015, California will not automatically conform to any of the changes made by the One Big Beautiful Bill Act (OBBBA).
This would be true even if SB 711 is enacted, which, as it’s currently written, would update California’s conformity specified date from January 1, 2015, to January 1, 2025. This is because OBBBA was not enacted until July 4, 2025.
Also, many of SB 711’s provisions would specifically not conform to most of the significant changes made by the Tax Cuts and Jobs Act (TCJA).
2025 California Tax Return Adjustments Due to Non-Conformity
Due to California’s current non-conformity to the tax changes made by OBBBA, additional adjustments will be required on the 2025 California tax return, including:
Senior Personal Exemption Deduction
Qualified Tip Deduction
Qualified Overtime Deduction
Deduction for Interest on Qualifying Passenger Vehicle Loans
Enhanced Personal Casualty Losses for Disaster Victims
Tax-Free Treatment of Withdrawals from IRC §529 Plans to cover:
Qualified Credential Program Expenses
Additional K–12 School Expenses
Disaster Relief – Wildfire Victims (Federal vs. California Treatment)
As a result of changes made by OBBBA, Los Angeles wildfire victims now qualify for Enhanced Personal Casualty Deductions applicable to Qualified Disaster Losses on their federal tax returns:
The 10% AGI floor on net casualty losses is not applicable
The $100 per casualty limit is increased to $500
Non-itemizers can claim the Personal Casualty Loss
However, California does not currently conform, meaning:
The 10% AGI floor still applies
The $100 per casualty limit remains in place
Non-itemizers cannot claim the Personal Casualty Loss
Other Areas of Continued Non-Conformity
California has never conformed to the following provisions—neither under TCJA nor under OBBBA:
Bonus Depreciation
Increased §179 Expense Amounts
Business Interest Limitation
Qualified Small Business Stock Exclusion
As a result, adjustments continue to be required for these items on the California return.
Exception – Research Expenses
Because California never conformed to the TCJA’s requirement that taxpayers amortize research expenses, OBBBA’s reinstatement of current expensing for domestic research expenses may actually result in one fewer adjustment on the California return.
San Diego Precision Tax Service
📍 Serving all 50 states remotely
Thank you Spidell. To listen to this podcast, go to: https://traffic.libsyn.com/secure/spidellpublishing/SCM_07-27-25.mp3