The CDTFA will begin taking tentative credit reservations on December 1 for the new Small Business Hiring Credit. There is only $100 million in available credit and it will be assigned on a first-come, first-served basis.
The credit is only available for the 2020 tax year and may be claimed against personal income tax, corporation franchise or income taxes, or, at the election of the taxpayer, against sales and use taxes. Taxpayers will reserve the credit with the CDTFA even if they are claiming the credit against their personal income or corporation franchise or income taxes.
The credit is equal to $1,000 for each net increase in qualified employees.
It’s critical that you talk with your tax professional now to determine if you may be eligible for the credit and are ready to sign up on December 1.
A list of the information that will be required when you apply for a tentative credit reservation as well as a list of FAQs is available on the CDTFA’s website:
www.cdtfa.ca.gov/taxes-and-fees/SB1447-tax-credit.htm
For more information, please contact our tax professionals at taxalerts@windes.com or toll free at 844.4WINDES (844.494.6337).
This article is reproduced with permission from Spidell Publishing, Inc.