CA Offers Two COVID-19 Relief Programs
At the end of 2020, the State of California launched two parallel relief programs for California businesses, designed to help with financial struggles related to COVID-19. Both programs have a short application period, so applicants must hurry!
California Small Business COVID-19 Relief Grant Program
The California Small Business COVID-19 Relief Grant Program is a tiered grant program, aimed at small businesses. Grant amounts vary from $5,000 to $25,000, determined by the business’s annual revenues. Applications are accepted through January 13, 2021. This program’s application requirements are fairly comprehensive, so businesses will need to set aside a bit of time to organize documents for submission.
Some key eligibility criteria are:
- Must fit the definition of an “eligible small business” or an “eligible small non-profit”
- Must be operating since June 1, 2019
- Must be currently operating or have a plan to re-open once allowed by the State
- Must be impacted by COVID-19 and the related restrictions
- Must be able to provide 2018 or 2019 tax returns or Form 990s, copy of official filing with the California Secretary of State, if applicable, or local municipality for the business such as one of the following: Articles of Incorporation, Certificate of Organization, Fictitious Name of Registration or Government-Issued Business License
- Must be able to provide acceptable form of government-issued ID
- Applicants with multiple entities (franchises, locations, etc.) are not eligible for multiple grants and may only apply once with their eligible small business with the highest revenue
To learn more and to apply for this grant, visit the website HERE. Applications will be accepted until 11:59PM on January 13, 2021.
There will be a second round for this program, for which applicants who applied unsuccessfully in this first round will not need to reapply – their application will remain active on file.
Main Street Small Business Tax Credit
On December 1, 2020, the California Department of Tax and Fee Administration (CDTFA) began accepting applications for tentative small business hiring credit reservation amounts through an online reservation system. Qualified small business employers must apply with the CDTFA for a credit reservation. The credit reservations will be allocated to qualified small business employers on a first-come, first-served basis. The reservation system will be available from December 1, 2020 at 8:00 a.m., through January 15, 2021. Within 30 days of receiving an application, CDTFA will notify each applicant via email whether a tentative credit reservation has been allocated to them and the amount of the tentative credit reservation.
To be eligible for this credit, businesses must:
- Employ 100 or fewer employees as of December 31, 2019, and
- Have suffered a 50 percent decrease or more in income tax gross receipts (generally, all income less returns and allowances), when comparing second quarter 2020 to second quarter 2019.
Funding for the Small Business Hiring Tax Credit program totals $100 million (of which approximately $45 million remains unclaimed as of this publication) and is to be allocated to qualified California small business employers. Generally, these employers may receive a credit of $1,000 for each net increase in qualified employees from April 1, 2020 through June 30, 2020, compared to July 1, 2020 through November 30, 2020. For more information click HERE for the program FAQs, and HERE to apply. The total amount of credits received cannot exceed $100,000 for each qualified California small business employer.