RTC §19902: (a) For purposes of this part, “qualified entity” means an entity that meets both of the following requirements for the taxable year: (1) The entity is taxed as a partnership or “S” corporation.

(a) For purposes of this part, “qualified entity” means an entity that meets both of the following requirements for the taxable year: (1) The entity is taxed as a partnership or “S” corporation. (2) The entity’s partners, shareholders, or members in that taxable year are exclusively corporations, as defined in Section 23038, or taxpayers as defined in Section 17004. (b) “Qualified entity” shall not include any of the following: (1) Publicly traded partnerships, as defined in Section 7704 of the Internal Revenue Code, as it read on January 1, 2021, as modified by Section 17008.5. (2) An entity that is permitted or required to be in a combined reporting group, as defined in paragraph (3) of subdivision (b) of Section 25106.5 of Title 18 of the California Code of Regulations. (c) The amendments made to this section by the act adding this subdivision shall apply for taxable years beginning on or after January 1, 2021, and before January 1, 2026.