Thursday, December 3, 2020

(SACRAMENTO) – The California Department of Tax and Fee Administration (CDTFA) has begun accepting applications for the Main Street Hiring Tax Credit, also referred to as the Small Business Hiring Tax Credit, which was established through the approval of SB 1447 (Bradford, Caballero, and Cervantes). This tax credit serves to provide financial relief to California small businesses during the COVID-19 pandemic.
 
“California’s 4.1 million small businesses and their workers continue to be among the hardest hit during the COVID-19 pandemic,” said Assemblymember Cervantes (D-Corona), Chair of the Assembly Committee on Jobs, Economic Development, and the Economy. “Research shows that between March and April of this year, private employment in the US fell by 15.2%. Small firms, however, experienced a 21.5% loss of jobs, while businesses with over 1,000 employees experienced the fewest job losses (13.3%). Addressing employment losses among small businesses is crucial to the state’s economic recovery. As Chair of the Assembly Jobs Committee, I am proud to have worked with my legislative colleagues to provide support to our small businesses as they fight to reopen and recover from the economic challenges as a result of the pandemic.”
 
Specifically, under the Main Street Hiring Tax Credit, eligible small business 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. This tax credit can be used against personal and corporate income tax liabilities or sales and use tax liabilities from the 2020 tax year. This is an important point, as other tax credits are not as flexible.
           
A small business seeking this credit must first apply starting Tuesday, December 1, 2020, through an online portal administered by the California Department of Tax & Fee Administration (CDTFA). These applications will be processed on a first-come, first-served basis, so it is important to reserve credits early. If applications are high, CDTFA may close the application window earlier than January 15, 2021. Information on eligibility, frequently asked questions, and application can be found here.
 
The Small Business Hiring Credit builds on existing relief programs, including a program created in April that allowed a small business to establish a 12-month, interest-free payment plan to temporarily defer up to $50,000 in sales and use tax liabilities. A full list of the state’s recovery and support programs available to small businesses can be found here.