Economic Development Collaborative (EDC) — Tax Credit Programs

TAX CREDITS THAT MAY APPLY TO YOUR BUSINESS

Tax Credits may help reduce the amount of tax your business owes. Your business may be eligible for more than 1 tax credit if you:

Current Tax Credit Programs

California Competes Tax Credit (CCTC): This tax credit is available for businesses that want to come to California and/or want to stay and grow in California. For more information CLICK HERE.

California Research: This credit is based on the federal research credit, with modifications. You may qualify for this credit if you engaged in qualified research activities in California. For more information CLICK HERE.

Credit Assignments: If you’re a C Corporation and you file a combined report, you may be able to assign credits to other members you file with (reporting group). This information applies only to assignments made under the general assignment statute. Visit R&TC 23663 for more information. Any credit held by a C corporation is eligible for credit assignment, except for the Alternative Minimum Tax (AMT) credit. For general information on credit assignments CLICK HERE.

Homeless Hiring Tax Credit: The credit is available for taxable years beginning January 1, 2022 through December 31, 2026. Employers may receive $2,500 to $10,000 in tax credit per eligible employee based on hours worked in the taxable year. Employers may claim up to $30,000 of credit per taxable year. For more information CLICK HERE.

2021 Main Street Small Business Tax Credit II: This bill provides financial relief to qualified small businesses for the economic disruptions in 2020 and 2021 that have resulted in unprecedented job losses. Taxpayers can use the credit against income taxes, or can make an irrevocable election to apply the credit against sales and use taxes. For more information CLICK HERE.

California Motion Picture and Television Production Credit: You may qualify for this credit if you produced a motion picture or television show in California. There are 3 types of motion picture and television production credits currently available. For more information CLICK HERE.

New Employment Credit: This credit is for employers that- Hire qualified full-time employees, Receive a reservation for that employee, Pay wages for work performed by that employee in a designated geographic area (DGA), Report the credit on a timely filed (including extensions) original return. For more information CLICK HERE.

Pass-through Entity (PTE) Elective Tax: For taxable years beginning on or after January 1, 2021, and before January 1, 2026, qualifying pass-through entities (PTEs) may annually elect to pay an entity level state tax on income. Qualified taxpayers receive a credit for their share of the entity level tax, reducing their California personal income tax. For more information CLICK HERE.

Work Opportunity Tax Credit: Is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment. For more information CLICK HERE.

For more information on how to access these tax credits follow the links above and consult with your CPA or tax accountant.

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