The State has announced a number of programs designed to assist small businesses including tax relief, loan programs and $500 million in grants for small businesses impacted by pandemic restrictions. Here’s what you need to know about each of the elements:
Temporary tax relief
- Automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax
- Extends existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales
- Interest free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions
Main Street Hiring Tax Credit
- Who is eligible? Businesses that employed 100 or fewer employees as of December 31, 2019, and suffered at least a 50 percent decrease in income tax gross receipts when comparing second quarter 2020 to second quarter 2019.
- The credit is equal to $1,000 per qualified employee, up to $100,000 for each small business employer. See full details here.
- Funds are distributed on a first come first served basis or before January 15 (as of December 18, about $50 million remains in the program)
- More information on the program
- Application portal
California Rebuilding Fund (loans)
- Who is eligible? Businesses who employed 50 or less full-time equivalent employees and had gross revenues of less than $2.5 million or below in 2019. See full eligibility info here.
- The loans are flexible, transparent and are designed to help businesses access the capital and advisory services they need to get through these challenging economic times.
- Loans can be up to $100,000 with a fixed annual interest rate of 4.25% and will need to be paid back over a 3 or 5-year term. More details here.
$500 million grant program
- Applications for round one will open on Wednesday, December 30, 2020 and close end of day on Friday, January 8, 2021.
- Grants range from $5,000 to $25,000 and eligibility is based on annual revenue from the business’ most recent tax return
- The full criteria for qualifying small businesses and nonprofits can be found at the newly launched CAReliefGrant.com
- Sign up here to receive more information as it is released.