From Assemblymember Mike A. Gipson
California has increased support for California 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 2020, compared to the gross receipts in April to June 2019.
- Apply for a tentative credit reservation from CDTFA between December 1, 2020 through January 15, 2021.
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.
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 or below in 2019 are eligible to apply.
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.