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Immediate Assistance for Businesses Impacted by COVID-19

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The State will provide temporary tax relief for eligible businesses impacted by COVID-19 restrictions, Governor Gavin Newsom announced on November 30. The temporary tax relief entails an automatic three-month income tax extension for taxpayers filing less than $1 million in sales tax, extends the availability of existing interest and penalty-free payment agreements to companies with up to $5 million in taxable sales and provides expanded interest free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.

The announcement builds on the state’s business support throughout the pandemic, including the Main Street Hiring Tax Credit, which authorizes $100 million in hiring tax credit for qualified small businesses. The credit is equal to $1,000 per qualified employee, up to $100,000 for each small business employer. The application opened on December 1. A full list of existing state support for businesses can be found at this link.

The Governor also announced the following immediate support and relief:

Tax Relief for Businesses Impacted by COVID-19

The California Department of Tax and Fee Administration will:

  • Provide an automatic three-month extension for taxpayers filing less than $1 million in sales tax on the return and extend the availability existing interest and penalty free payment agreements to companies (with up to $5 million in taxable sales)
  • Broaden opportunities for more businesses to enter into interest-free payment arrangements.
  • Expand interest-free payment options for larger businesses particularly affected by significant restrictions on operations based on COVID-19 transmissions.

$500 Million for New COVID Relief Grant for Small Business

The Governor announced the creation of a $500 million COVID Relief Grant administered by the California Office of the Small Business Advocate (CalOSBA) at the Governor’s Office of Business and Economic Development for small businesses that have been impacted by COVID and the health and safety restrictions. Funds would be awarded to selected intermediaries with established networks of Community Development Financial Institutions to distribute relief through grants of up to $25,000 to underserved micro and small businesses throughout the state by early 2021. Non-profits would also be eligible for these grants. CalOSBA is establishing the program and will make it available to small businesses as soon as possible – for updates on availability visit this link.

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