Details of Public Law 119-21, section 70433 , One Big Beautiful Bill Act

The provision modifies the information reporting requirement for reporting information at source and for payments of remuneration for services. The reporting threshold is increased from $600 to $2,000 and applies when (1) persons engaged in a trade or business make payments in the course of such trade or business to another person and (2) when a person engaged in a trade or business pays remuneration to any person for services. The provision also requires the threshold amount for reportable payments to be increased by the cost-of living adjustment.

Additionally, the increased reporting threshold also applies to backup withholding rules when the aggregate payments exceed information reporting thresholds of $2,000.

California does not conform to Internal Revenue Code (IRC) sections requiring information returns to be filed but instead provides that the Franchise Tax Board (FTB) may require a copy of any information return required to be filed with the Secretary under IRC section 6041 and 6041A, at the time and in the form and manner as the FTB may, by forms and instructions, require.

Any information returns filed under IRC section 6041 and 6041A that are required to be filed for California purposes would include the information as modified by this federal act.

Under the PITL, California generally conforms January 1, 2025. California does not conform to the exclusion from backup withholding for reportable payments that do not exceed the $2,000 threshold under IRC section 6041 and 6041A. Therefore, for purposes of backup withholding, the $600 threshold would continue to apply for California purposes for these payments.