A new pandemic-related credit went live today for small businesses in California.
The credit is called the Small Business Hiring Credit – SB 1447.
Many of you will qualify for this credit. To qualify, there are a few conditions:
- You have fewer than 100 employees
- You experienced more than a 50% reduction in gross receipts from April to June 2020, compared to the gross receipts in April to June 2019
- You have more full-time equivalent employees from July to November of 2020 than from April to June of 2020.
You must apply for this credit between December 1st and January 15th. There is $100 million allocated for this credit and it is a first-come, first-serve basis.
The credit amount is equal to $1,000 for each net increase in the monthly average number of employees. We would expect this credit to range between $1,000 to $5,000 for clients that qualify.
The credit will be claimed as a tax credit at the time of filing your individual income tax returns for your 2020 California returns. However, the credit must be reserved beforehand.
If you are a monthly accounting client, we will proactively determine if you should apply for this credit. We will also help submit the application.
If you are not a monthly accounting client, you will need to apply for this credit on your own. You can start the application by going here.
Please reach out with questions.