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California COVID-19 Funding & Financial Resources

California COVID-19 Funding & Financial Resources

California COVID-19 Funding & Financial Resources

Small Business Tax Relief & Recovery Loans
 
 
 
Last week the State announced a package of assistance for small businesses impacted by COVID-19, including $500 million in grants. Businesses can sign up here to receive an update when the programs are launched. The assistance programs include tax relief and recovery loans through the California Rebuilding Fund.
Sign Up to be Notified
 
 
 
 
 
 
Beginning December 1, 2020 and continuing through January 15, 2021, CDTFA is accepting applications, through its online reservation system, for qualified small business owners to reserve up to a $100,000 hiring tax credit. The small business hiring tax credit provides a credit that a small business employer can use to offset their income taxes or their sales and use taxes when filing their tax returns.
 
The application requires the Full Time Equivalent (FTE) Employee Count between April 1, 2020 - June 30, 2020 compared to July 1, 2020 - November 30, 2020. Clients with access to a Payality online payroll system, can use the PPP FTE Look Back Period Report (Click Here for Instructions) to calculate the FTE for both periods. You may also request it from your Payality Client Support Specialist.  
 
Interest-free deferral of sales/use tax up to $50,000 for businesses with less than $5 million in taxable sales.
 
Qualified small businesses can apply for a 12-month, interest-free payment plan to defer payment of up to $50,000 for 4th quarter 2020 and the 1st quarter of 2021 in sales and use tax liability. The deferred tax would be paid in twelve equal monthly installments, with the first payment not due until April 2021.
 
If you are experiencing a hardship as a result of COVID-19, you may request up to a 60-day extension of time from the EDD to file your state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.
 
California excludes forgiven Paycheck Protection Program loans from state gross income
California has now passed Assembly Bill No. 1577, conforming to the PPP loan forgiveness rules. A.B. 1577 provide that gross income does not include any covered loan amount forgiven pursuant to Section 1106 of the CARES Act, pursuant to the Paycheck Protection Program and Health Care Enhancement Act, or pursuant to the Paycheck Protection Program Flexibility Act of 2020. 
 
However, like current IRS rules, A.B. 1577 also denies business expense deductions for those expenses that were paid for using forgiven loan funds. Current stimulus negotiations in Congress include reversing this ruling by allowing these expenses to be deducted and if it passes, we are hopeful that California will also follow the federal guidelines. 
 
 
Loans/Grants
 
The California Rebuilding Fund is a public-private partnership that is aggregating funding from private, philanthropic, and public sector sources – including a $25 million anchor commitment from IBank – to address the capital and advisory needs of California’s small businesses as they reopen and recover from the COVID-19 health and economic crisis  
 
$50 million in state funding for both the Small Business Disaster Relief Loan Guarantee Program and Small Business Loan Guarantee Program
 
 
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 and non-profits 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. Nonprofits in either 501(c)(3) or 501(c)(6) categories with yearly gross revenues of $2.5 million or less will be eligible for a grant through the new program. Nonprofits in all fields of work are eligible; in fact, arts and cultural institutions are explicitly included. CalOSBA is establishing the program and will make it available to small businesses as soon as possible – for updates on availability visit here.
 
 
 
Federal Programs
 
 
 
 
 
This loan provides economic relief to small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue.
 
Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly
 
The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Eligible employers can file form 7200 to claim an advance on the credit. PLEASE NOTE: Employers who received a PPP Loan are not eligible for the Employee Retention Credit.
 
The current PPP loan period closed on August 8, 2020. However, Congress is in active discussions to reopen the PPP loan program with one proposal allocating $288 billion in a new round of loans. 
What to do if you have a reported case of COVID at your business
 

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