Financial Relief Available to Qualified Small Business Employers
Millions in Tax Credits Still Available
Sacramento — The California Department of Tax and Fee Administration (CDTFA) is still accepting reservations for the 2021 Main Street Small Business Tax Credit II, which provides COVID-19 financial relief for qualified small businesses. CDTFAʼs online system will be accepting applications for qualified small business employers to reserve tax credits of up to $150,000 until November 30 at 11:59 p.m.
Tax credits will be allocated on a first-come, first-served basis through November 30 or until the $116 million in available credits runs out.
Qualified small business employers may apply to reserve $1,000 per net increase in qualified employees, up to $150,000, to offset income, or sales and use taxes, when filing a return. Businesses that received a tax credit under the first round of the Main Street Small Business Tax Credit (2020) can still apply for additional credits under the Main Street Small Business Tax Credit II. Credit reservation amounts will generally be reduced by the credit reserved or received under the first round of tax credits. CDTFA's online reservation system will perform all the qualification and tax credit calculations.
The credit applies to California small businesses that:
Had a net increase in qualified employees,
Employed 500 or fewer employees as of December 31, 2020, and
Experienced a decrease of 20 percent or more in income tax gross receipts by comparing specified periods.
Qualified small business owners will be able to apply for the credits on CDTFA's online reservation system (https://taxcredit.cdtfa.ca.gov/). For a list of items required (www.cdtfa.ca.gov/industry/main-street-small-business-tax-credit-II-AB150.htm#reserving-credit) to apply and to learn if you qualify (https://www.youtube.com/watch?v=epkR8aG43E8&t=38s), visit CDTFA's Main Street Small Business Tax Credit II (www.cdtfa.ca.gov/industry/main-street-small-business-tax-credit-II-AB150.htm#overview) website (also available in Español (www.cdtfa.ca.gov/industry/main-street-small-business-tax-credit-II-AB150-spanish.htm)). Business employers who apply once all credits have been exhausted will be placed on a waiting list.
The California Department of Tax and Fee Administration (CDTFA) administers California's sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs. CDTFA-administered programs account for more than $73 billion annually, which in turn supports local essential services such as transportation, public safety and health, libraries, schools, social services, and natural resource management programs through the distribution of tax dollars going directly to local communities.