Details of Public Law 117-328, section 332 , Consolidated Appropriations Act, 2023, Employers Allowed to Replace Simple Retirement Accounts with Safe Harbor 401(k) Plans During a Year

Under RTC sections 17501 and 24601, California automatically conforms to the federal changes made to Part I of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, which includes IRC section 408. Therefore, the federal changes made by this provision automatically applies under California law.

California conforms to IRC section 72(t)(6), additional tax on early distributions from simple retirement accounts as applicable for federal purposes for the same taxable year using a rate of 6 percent in lieu of the federal tax rate (RTC section 17085(c)(2)). The distributions from simple retirement plans would not be subject to a California early withdrawal tax if they are not subject to the federal additional tax on early distributions.