CA SB1501

Allows partnerships and S corporations to elect to pay an elective tax without making a June 15 prepayment (or with an underpayment) for taxable years 2024-2025, provided they pay the full elective tax amount by the original return due date.

Imposes interest on any unpaid or underpaid June 15 prepayment from June 15 through the payment date for entities that defer payment under the new option.

Reduces the personal income tax credit available to partners, shareholders, or members of entities that fail to make the June 15 prepayment by 10 percent of the deferred amount.

Applies the amendments to taxable years beginning on or after January 1, 2024, and before January 1, 2026.

Maintains the existing 9.3 percent credit rate for qualified taxpayers whose entities comply with prepayment requirements.