Tax Relief and Assistance
Find information on tax relief and assistance from the state and federal government below:
- California Competes Tax Credit (CCTC): The Governor’s Office of Business and Economic Development (GO-Biz) is accepting applications now through Monday, January 25, at 11:59 p.m. for the California Competes Tax Credit (CCTC). There are $80 million in tax credits available during this application period for businesses that are expanding and adding quality, full-time jobs in California that might not otherwise be created by the business or any other business. For more information visit the program website here or register for an informational webinar here.
- Automatic Filing Extension: The California Department of Tax and Fee Administration is providing an automatic three-month extension on payments and returns originally due between December 1, 2020, and April 30, 2021 for taxpayers filing less than $1 million in tax. Eligible taxpayers are not required to make a request to take advantage of this extension.
- Interest-Free Payment Plans: Qualified small businesses can apply for a 12-month, interest-free payment plan from the California Department of Tax and Fee Administration to defer payment of up to $50,000 for 4th quarter 2020 and the 1st quarter of 2021 in sales and use tax liability. The deferred tax would be paid in 12 equal monthly installments, with the first payment due April 2021. Any business with annual taxable sales of $5 million or less will be eligible for the new payment plans, including those taxpayers already in existing payment arrangements with the CDTFA. All existing interest-free payment plans will remain in place. Businesses with sales greater than $5 million in sectors particularly impacted by operational restrictions due to the pandemic may also apply for an interest-free payment plan. CDTFA will extend these payment arrangements to all businesses demonstrating a significant drop in sales, regardless of annual sales volume.
- Small Business Hiring Tax Credit: California Department of Tax and Fee Administration is accepting applications for tentative small business hiring credit reservation amounts through an online reservation system. The credit reservations will be allocated to qualified small business employers through January 15 on a first-come, first-served basis. Employers must have 100 or fewer employees as of Dec. 31, 2019 and suffered a 50% decrease or more in income tax gross, when comparing second quarter 2020 to second quarter 2019.
- Employee Retention Tax Credit: The IRS introduced an employee retention tax credit designed to encourage businesses to keep employees on their payroll. This credit is available to employers if their business is fully or partially suspended by government order or experience a decline in gross receipts by more than 50% in a quarter compared to the same quarter in 2019. The amount of the credit is 50% of qualifying wages paid up to $10,000 in total. Wages paid after March 12, 2020, and before Jan. 1, 2021, are eligible for the credit. Wages taken into account are not limited to cash payments, but also include a portion of the cost of employer provided health care.
- Request a 60-Day Extension to File Payroll Reports: The California Employee Development Department is offering businesses directly affected by coronavirus up to a 60-day extension to file your state payroll reports and deposit state payroll taxes without penalty or interest, upon request. Upon filing, you must include the impact of coronavirus in your written request for the extension. Your request must be received within 60 days from the original past-due date of the payment or return.