(CBM) – Starting Dec.1 at 8 a.m., California small businesses that have hired new employees during the COVID-19 pandemic can begin applying for up to $100,000 in tax credits. The California Department of Tax and Fee Administration (CDTFA) has set up a portal on its website to receive the applications.
The CDTFA plans to close the window for accepting applications on January 15, 2021. However, the agency is warning businessowners to apply as soon as possible for the tax credits that will be awarded on a “first come, first serve” basis. If there is a high volume of applications, the agency says it might terminate the program earlier.
In September, Gov Newsom signed Senate Bill (SB) 1447 into law, responding to the devastating effect the COVID-19 pandemic has had on small businesses in the state. According to Opportunity Insights, a Harvard University online tracker that monitors the health of economies across the United States, California’s small businesses are down 29.3% in revenue compared to January of this year. According to Yelp’s September local impact economic report, more than 19,000 businesses have closed in California since the beginning to the COVID-19 global health crisis.
“As the authors of SB 1447, we want to make you aware of a new $100 million tax credit created by that legislation: The Small Business Hiring Credit. This is one way that we are working to ease economic hardships imposed on small businesses due to the necessary response to the COVID-19 pandemic,” three California senators who introduced the legislation wrote in a letter reminding businesses in the state to apply for the assistance.
The letter — signed by Sen. Steven Bradford (D-Los Angeles), Sen. Anna M. Caballero (D-Salinas) and Assemblymember Sabrina Cervantes (D-Riverside) – says
“eligible small businesses can receive $1,000 in credit for each net new hire that occurred during the second half of 2020, up to $100,000 per business.”
Small businesses can apply the tax credits to both personal and corporate income tax liabilities or sales and use tax liabilities from the 2020 tax year.
To qualify, the applying small business must have less than 100 employees (including part-time employees). It must have suffered a 50 % or more year-over-year decrease in revenue during the second quarter of 2020 (from April 2020 to June 2020); and it must have hired new employees between July 2020 and November 2020.
“Thank you to all the hardworking California small business owners that continue to persist through the difficulties of this year. If you are eligible for the Small Business Hiring Credit, we hope you will apply,” the three senators closed their letter to small business owners.
By Tanu Henry | California Black Media