Small Business Support in California

California Governor Gavin Newsom has announced a variety of small business support in California. The support plans are for those who were impacted by COVID-19. Resources for California businesses include temporary tax relief, the Main Street Small Business Tax Credit, cash grants, the California Rebuilding Fund, and more.

Temporary Tax Relief

In April, Governor Newsom signed an Executive Order providing the following temporary relief:

  • Automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax
  • Extends the availability of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales
  • Expand interest-free payment options for businesses whose operations have been affected by COVID-19

Main Street Small Business Tax Credit

The California Department of Tax and Fee Administration is now taking reservations for the Small Business Hiring Tax Credit, also known as the Main Street Small Business Tax Credit, under Senate Bill 1447.

Employers may receive a credit of $1,000 for each net increase in qualified full-time equivalent employees (FTE). This credit is available for FTEs employed from April 1, 2020, through June 30, 2020, compared to FTEs employed July 1, 2020, through November 30, 2020. The maximum amount available to each qualified California small business employer is set at $100,000.

Small businesses applying for this relief must have employed fewer than 100 employees as of December 31, 2019. Small businesses must also have suffered at least a 50% decrease in income tax gross receipts when comparing second quarter 2020 to second quarter 2019.

Tentative credit reservations are allocated on a first-come, first-served basis. As of the morning of December 14, 2020, over $52 million of available credit has already been reserved, leaving over $47 million still available.

Cash Grants and Capital

Cash grants up to $25,000 administered by the California Office of the Small Business Advocate will become available to small businesses impacted by COVID-19 from an emergency appropriation fund of $500 million. Funds will be awarded to underserved micro and small businesses throughout the state by early 2021. Program details and requirements are still being developed.

The California Rebuilding Fund

In late November, Governor Newsom announced the opening of the California Rebuilding Fund. This loan program makes $25 million available to help small businesses impacted by COVID-19 rebuild from the economic crisis and keep local economies strong.

Businesses that employed 50 or fewer full-time equivalent employees and had gross revenues of less than $2.5 million or below in 2019 are eligible to apply.

More Support for California Small Business

There are also resources available to businesses, including assistance for opening, further tax relief, and access to capital. For questions or concerns about small business support in California, contact us.