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.