On December 1, 2020, the California Department of Tax and Fee Administration (CDTFA) will begin 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.
Taxpayers can use the credit against income taxes, or can make an irrevocable election to apply the credit against sales and use taxes.
To qualify for the credit, taxpayers (employers) must:
-Have 100 or fewer employees on December 31, 2019 (all employees, including part-time employees).
-Have experienced a 50% decrease in gross receipts from April to June, 2020, compared to the gross receipts in April to June 2019.
-Apply for a tentative credit reservation from CDTFA during the period of December 1, 2020 through January 15, 2021.
-Not be required or authorized to be included in a combined report.
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