Ref: SB 1447
September 2020: Governor Newsom signed a new law offering a credit to small businesses. UPDATED SEPT 29, 2020.
Here’s the highlights from an AP news release. To qualify the business:
- Has to have 100 employees or less as of 12/31/2019 AND
- Has to have lost 50% or more of gross sales within April – June 2020 as compared to the same period in 2019 AND
- Have gross sales of less than $5 million annually AND
- Hire new employees by December 1, 2020.
What: A credit of $1,000 per new hire to be taken on the income tax return of the business OR applied against sales tax to be remitted to CDTFA.
Calculation: Compare the average full-time equivalent (FTE) employees for Q2 2020 with the average FTE for 7/1/2020 – 11/30/2020. (Note: Because of this, a business completely closed in Q2 2020 would count all of its FTE during 7/1/2020 through 11/30/2020 as a “net increase.”
RESERVING THE CREDIT: Must be done through California Department of Tax and Fee Administration (CDTFA) on a first-come first -served basis. The request must be filed beginning on December 1, 2020 and ending on either January 15, 2021 OR when the entire $100 million allocated to the credit is reached. The CDTFA will put instructions on its website for credit application.
THIS IS FOR SMALL BUSINESSES IN CA AND MAY WELL BE THERE FOR YOURS.
