Details of Public Law 119-21, section 70432 , One Big Beautiful Bill Act

The provision modifies the information reporting requirement for third party settlement organizations not to require reporting on third party network transactions of participating payees if the amount that would be required to be reported is $20,000 or less and the aggregate number of transactions do not exceed 200. Third party settlement organizations were previously not required to report unless reportable transactions exceeded $600 dollars.

The provision also provides that for backup withholding purposes, reportable payments include payments in settlement of third-party network transactions when the aggregate transactions exceed information reporting thresholds of $20,000 and the aggregate number of transactions exceed 200.

California does not conform to Internal Revenue Code (IRC) sections requiring information returns to be filed. Instead, a copy of any information return filed with the Secretary under IRC section 6050W may be required to be filed with the Franchise Tax Board (FTB) at the time and in the form and manner as the FTB may, by forms and instructions, require.

For calendar years beginning after December 31, 2021, any information returns filed under IRC section 6050W that are required to be filed for California purposes would include the information as modified by this federal act.

Under the Personal Incomed Tax Law (PITL), California generally conforms by reference with modifications to the federal rules related to backup withholding under IRC section 3406 as of the specified date of January 1, 2025. California does not conform to the exclusion from backup withholding for reportable payments that are in settlement of a third-party network transaction that do not exceed $20,000 and 200 transactions added by OBBBA. California treats settlements of third-party network transactions subject to back up withholding as reportable payments.