Main Street Small Business Tax Credit – Get your reservation now! December 2020 Tax News
The time to get your reservation for the new Main Street Small Business Hiring Tax Credit has started! To claim the credit, taxpayers must obtain a tentative credit reservation between December 1, 2020, and January 15, 2021. The California Department of Tax and Fee Administration (CDTFA) administers the reservations where you can apply for one. The total amount of credit available is $100 million and will be allocated on a first-come-first-served basis.
The credit can offset either sales and use tax, or income and franchise tax. Taxpayers must make this election as to which tax they will offset when applying for their reservation.
Eligible taxpayers must:
- Have had 100 or fewer employees on December 31, 2019
- Have had a 50% reduction in their gross receipts for the period of April through June 2020 when compared to the same period in 2019
- Must not file or be eligible to file a combined report
Each taxpayer is eligible for up to $100,000 in credit. The amount of credit is $1,000 per increase in employees, as measured in average monthly full-time-employee equivalents. The increase is measured by comparing the period from July through November, 2020, to the period from April through June, 2020.