California businesses have been hit particularly hard with COVID-19 restrictions, which have been necessary to save lives. The state has increased support for small businesses through hiring tax credits, automatic sales tax extensions, and access to capital.
"Main Street" Small Business Hiring Tax Credit
Starting today, qualified small businesses adversely impacted by COVID-19 can reserve tax credits for hiring full-time employees. There are a limited number of credits available, so be sure to share this message TODAY.
To qualify for the credit, taxpayers (employers) must:
- Have 100 or fewer employees on December 31, 2019 (all employees, including part-time employees).
- Have experienced a 50% decrease in gross receipts from April to June this year, compared to the gross receipts in April to June 2019.
- Apply for a tentative credit reservation from CDTFA between December 1, through January 15, 2021.
Access to Capital & Technical Assistance
The California Rebuilding Fund is now taking loan applications to support California's small businesses, especially those located in economically disadvantaged and historically under-banked areas. Businesses with 50 employees or less and revenues less than $2.5 million in 2019 are eligible to apply.
Sales Tax Relief
There is also an automatic three-month tax extension for taxpayers filing less than $1 million in sales tax, an extension of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales, and expanded interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.
State grants for eligible non-profits, small and micro-businesses
California's Office of the Small Business Advocate is working to establish the program.
Additional Support for Business Owners
During this unprecedented economic time, California has taken multiple actions to support small businesses. This includes:
- Expanding eligibility for the California Earned Income Tax Credit to self-employed and small business owners.
- Waived $800 minimum franchise tax for small and medium-sized businesses during their first year of business creation.
- Exempting Paycheck Protection Program (PPP) loans provided to California small businesses under the CARES Act.
Download a complete list of programs to support California businesses [PDF]