2021 Main Street Small Business Tax Credit II
The Main Street Small Business Tax Credit II provides qualified small
business employers in California with COVID-19 financial relief by
allowing them to offset their income taxes or sales and use taxes with the
credit when filing returns.
Qualified small business employers may apply to reserve $1,000 per net
increase in qualified employees, not to exceed $150,000.
The credit will be allocated on a reservation basis to qualified small
business employers on a first-come, first-served basis.
The reservation system will be available from November 1, 2021, through
November 30, 2021, or an earlier date if the allocation limit
is reached.
Qualifications
- 500 or fewer employees
- 20% or greater decrease in gross receipts (as reported to Franchise
Tax Board (FTB) – 2019 vs. 2020, or fiscal year equivalent, as defined
by FTB)
- Net increase in number of qualified employees, as defined by FTB
(see below)
Credit Calculation
The credit is calculated based on monthly, full-time equivalent (FTE)
qualified employees. The net increase in qualified employees will be the
amount equal to B minus A.
A. The average monthly
FTE employed during the three-month period April 1, 2020, through June
30, 2020.
B. The lesser of either the following:
1. The average monthly
FTE employees employed during the 12-month period July 1, 2020, through
June 30, 2021.
2. The average monthly FTE employees employed during
the three-month period April 1, 2021, through June 30, 2021.
Need Help?
This may provide significant opportunities for your company. However, the
interplay between the Consolidated Appropriations Act, the CARES Act, the
American Rescue Plan Act, and various Internal Revenue Code sections is
nuanced and complicated so professional advice may be needed.
If you think your business may qualify and is potentially interested in
claiming this Main Street Small Business Tax Credit, please email us
at
askboos@booscpa.com.
