Last week, California Governor Gavin Newsom shared news with how he and his team are doing everything in their power to support small businesses struggling during these unprecedented times. He stated that 44% of businesses are feeling vulnerable to the pressures of the pandemic. Because of this, many businesses have reported that they may be forced to close in the near future.
With this in mind, Newsom has signed off on three bills, effective January 1, 2020, that aim to help support communities throughout the state. The goal of these laws is to help provide financial relief while also encouraging businesses to hire/rehire more workers. In effect, this would help lower the unemployment rate that the State is currently battling.
The first bill, Assembly Bill 1577, works to ensure that forgiven COVID-19 loan funds are not categorized as taxable income. This safeguards business owners in California who applied for and utilized the federal Paycheck Protection (PPP) loans from experiencing a tax increase come tax season.
The second bill, Senate Bill 115, though less business aid-related, appropriates $561 million this year in stimulus and construction projects across the state.
The third bill, Senate Bill 1447, will offer tax credits for small businesses that have financially suffered during the pandemic.
With the implementation of this new $100-million tax credit through Senate Bill 1447, businesses that were forced to let go of their employees as a result of closures and budget cuts may be eligible for a tax credit of up to $1,000 for each employee hired or rehired between July and the end of November (up to $100,000 per business). This will not apply to all businesses, however, for the company must report a gross income decline of at least 50% during the pandemic period. This restriction aims to refine the bill and target those who are most in need.
On Sunday, September 26, 2020, I appeared on KABC-7 to discuss the new laws passed by California Governor Newsom designed to provide economic relief due to the impact of the COVID-19 pandemic. I also discussed business and legal considerations for businesses returning employees to work and the rights of working parents during this time.
Resources for Employers
California and the federal government are providing a variety of assistance options for small businesses and employers impacted by the pandemic. This includes:
- Interest-free deferral of sales/use tax up to $50,000 for businesses with less than $5 million in taxable sales
- $1,000 tax credit for new employees hired by small businesses (up to $100,000 per business)
- Excluding forgiven PPP loans from state gross income
- Providing capital to the California Rebuilding Fund to support small business loans
- 90-day extension for businesses filing a return for less than $1 million in taxes
- $50 million in state funding for the Small Business Disaster Relief Loan Guarantee Program via IBank to provide loans to underserved small businesses
- Small Business Debt Relief for existing SBA borrowers
- Federal small business stimulus programs like PPP and EIDL
- Federal tax credits to small businesses for COVID-19 employee paid leave
There are also many resources available to California employers regarding programs that support sick leave and workers’ compensation, support for working families, childcare, health, and safety guidelines, and much more.
For a complete list of these valuable resources noted above, visit COVID19.CA.GOV.
Experienced Employment Law Attorney, Mediator, Arbitrator, Investigator, Legal and Media Commentator
Angela Reddock-Wright is an employment and labor law attorney, certified workplace and Title IX investigator (AWI-CH), mediator, and arbitrator in Los Angeles, CA. Known as the “Workplace Guru,” Angela is an influencer and leading authority on employment, workplace/HR, Title IX, hazing, and bullying issues.
Angela is a regular legal and media commentator and analyst and has appeared on such media outlets as Entertainment Tonight, Law and Crime with Brian Ross, Court TV, CNN, ABC, CBS, Fox 11 News, KTLA-5, the Black News Channel, Fox Soul – The Black Report, NPR, KPCC, Airtalk-89.3, KJLH Front Page with Dominique DiPrima, the New York Times, the Washington Post, the LA Times, Yahoo! Entertainment, People Magazine, Essence Magazine, the Los Angeles Sentinel, LA Focus, Our Weekly and the Wave Newspapers.
Angela also is a member of the panel of distinguished mediators and arbitrators with Judicate West, a California company that represents the gold standard in dispute resolution. She also owns her own law firm, the Reddock Law Group of Los Angeles, specializing in workplace and Title IX discrimination, harassment, and sexual assault investigations.
This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.
The post New COVID-19 Tax Cuts for Eligible California Businesses and Resources for Employers first appeared on Angela Reddock-Wright.