California State Tax Credits

The Golden State offers various business tax credits and incentives for bringing your business to California, hiring employees in certain areas, produce a movie or television show, do qualified research activities. Discover how to save money with California State tax credits.

California Competes Tax Credit

The California Competes Tax Credit Program, run by Governor's Office of Business and Economic Development, is an income tax credit available to businesses that want to locate or remain in California and grow. In the fiscal year 2022-2023, a total of $304,727,233 in California Competes Tax Credit is available for allocation. Businesses commit to meeting yearly milestones for full-time employment, salary levels, and project investment under this 5-year agreement.

Experts at the Incencred tax credit team can guide you through the application procedure and secure a California research and development tax credit for your company to reduce your tax obligations.

Eligibility

Created with Fabric.js 3.6.3

Business should be located in California conducting qualified research activities

Created with Fabric.js 3.6.3

Meet milestones for each taxable year to earn the allocated credit for that year.

California research tax credit

The California Research Tax Credit Program, run by California based Franchise Tax Board, offers small businesses an opportunity to reduce tax burdens by availing the tax credit if you conduct appropriate research activities in California. The credit amount is equal to the sum of 15% of qualified expenses that exceed a base amount and 24% of basic research payments.

Experts at the Incencred tax credit team can guide you through the application procedure and secure a California research and development tax credit for your company to reduce your tax obligations.

Eligibility

Business should be located in California conducting qualified research activities

Created with Fabric.js 3.6.3

Able to demonstrate research activities conducted within California State

CA Motion Picture and Television Production tax credit

To promote film or television show production within the California state, California based Franchise Tax Board is offering CA Motion Picture and Television Production Credit. This tax credit is allocated and certified by the California Film Commission (CFC). The credit amount is based on the qualified production budget. There are currently four types of motion picture and television production credits available. You may make the following claims:

- - Original California Motion Picture and Television Production Credit
- - New California Motion Picture and Television Production Credit
- - Program 3.0 California Motion Picture and Television Production Credit
- - California Soundstage Filming Tax Credit, enacted under Senate Bill 144

Experts at Incencred tax credit team can guide you through the application procedure and secure a film production tax credit for your entertainment company to reduce your tax obligations.

Eligibility

Created with Fabric.js 3.6.3

Have a minimum production budget of $1Million

Created with Fabric.js 3.6.3

Atleast 75% of Production Budget must be utilized within California State

Created with Fabric.js 3.6.3

Atleast 75% of Total Principal Photography days must occur in California State.

Homeless Hiring Tax Credit

To promote employment among the homeless population within the California state, California based Franchise Tax Board is offering Homeless Hiring Tax Credit to boost the employers to hire homeless talent. The credit is valid for tax years beginning January 1, 2022, and ending December 31, 2026. Employers may receive a tax credit ranging from $2,500 to $10,000 per eligible employee based on actual hours worked during the taxable year. Employers may claim a credit of up to $30,000 per taxable year. To claim the credit, employers must make a tentative credit reservation with FTB. Employers can claim the tax credit on their tax returns. Each year, a total of $30 million in credit is available under this category for employers.

Experts at Incencred tax credit team can guide you through the application procedure and secure a film production tax credit for your entertainment company to reduce your tax obligations.

Eligibility

Created with Fabric.js 3.6.3

Obtain an HHTC certificate from a certifying organization for each eligible employee.

Created with Fabric.js 3.6.3

Pay wages that are at least 120% of the California minimum wage.

Created with Fabric.js 3.6.3

Make a tentative credit reservation with the Employment Development Department (EDD) within 30 days of completing the New Hire reporting requirement.

Main Street Small Business Tax Credit

To promote employment among the small business within the California state for the economic disruptions that occurred in 2020 and 2021, resulting in unprecedented job losses, California based Franchise Tax Board (FTB) & CDTFA is offering Main Street Small Business Tax Credit to boost the employment in CA state. Taxpayers can apply the credit to income taxes or make an irreversible election to apply the credit to sales and use taxes. The allocation limit for this credit will be approximately $116 million. The tax credit amount is equal to $1,000 for each net increase in qualified employees, measured by the monthly average full-time employee equivalents. Each eligible employer can avail the maximum tax credit for $150,000.

Experts at Incencred tax credit team can guide you through the application procedure and secure a film production tax credit for your entertainment company to reduce your tax obligations.

Eligibility

Created with Fabric.js 3.6.3

Have 500 or fewer employees (all employees, including part-time employees) on December 31, 2020, whose wages are subject to California withholding laws.

Created with Fabric.js 3.6.3

Have seen a 20% or greater drop in gross receipts

Created with Fabric.js 3.6.3

Apply for a tentative credit reservation from CDTFA between November 1, 2021 and November 30, 2021, and you will receive a tentative credit reservation.

New Employment Tax Credit

To promote new employment among the small business within the California state for the, California based Franchise Tax Board (FTB) is offering New Employment Tax Credit to boost the new employment within CA state. Taxpayers can apply the credit to income taxes or make an irreversible election to apply the credit to sales and use taxes. The tax credit amount is equal to 35% of the qualified wages.

Experts at Incencred tax credit team can guide you through the application procedure and secure a film production tax credit for your entertainment company to reduce your tax obligations.

Eligibility

Must be engaged in a trade or business within the DGA in California which is not listed on excluded businesses

Created with Fabric.js 3.6.3

Hire qualified full-time employees and get a reservation for them.

Created with Fabric.js 3.6.3

Has a net increase in jobs for availing the tax credit

Created with Fabric.js 3.6.3

Pay the workers wages for services performed in a designated geographic area (DGA)

Case Study

Dream. Innovate. Implement.

Our extensive tax credit team is the finest in the industry. We cultivate smart ideas for start-ups and successful businesses in the industry. By adhering to the best practices, we provide next generation tax credit consultancy.

  • We provide free initial consultation to explore the tax credits eligibility.
  • We work with some of the most successful businesses in the industry and start-ups

Work Process

Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Testimonials
Alex Martin Envato Customer
Terry Figueroa Marketing Manager
Kaycee Hess Human Resources

" Nulla metus ullamcorper vel tincidunt sed euismod nibh Quisque volutpat condimentum velit class aptent taciti sociosqu ad litora torquent per conubia nostra. "

" Nulla metus ullamcorper vel tincidunt sed euismod nibh Quisque volutpat condimentum velit class aptent taciti sociosqu ad litora torquent per conubia nostra. "

" Nulla metus ullamcorper vel tincidunt sed euismod nibh Quisque volutpat condimentum velit class aptent taciti sociosqu ad litora torquent per conubia nostra. "

Awesome Works

Insights

Top Seven Warning Signs of Incorrect Employee Retention Credit Claims: A Critical Review Before the March 22 Deadline

Top Seven Warning Signs of Incorrect Employee Retention Credit Claims: A Critical Review Before the March 22 Deadline admin /…

Read more
Tax Compliance CFO Services
Conquer US Tax Compliance from Any Corner of the Globe!

Conquer US Tax Compliance from Any Corner of the Globe! admin / March 24, 2024 / Business and Finance The…

Read more
Risk Management
Navigating Uncertainty: The CFO’s Guide to Risk Management

Navigating Uncertainty: The CFO’s Guide to Risk Management admin / March 28, 2024 / CFO Services In the dynamic landscape…

Read more

FAQ

Employee retention tax credit abbreviated as “ERC” is a retroactive refundable tax credit provided by the CARES Act in 2020 for supporting businesses to retain employees in  2020 & 2021.

Employers who were impacted as follows are eligible for ERTC:

1. full or partial suspension orders by the Government, or

2. Had significant decline in sales, or

3. Started business operations after 02/15/2020, or

4. Severely financially distressed employer

Employee retention tax credit (ERC) are not taxable but the employers are required to reduce wages declared on income tax returns for respective years for which Employee retention tax credit have been approved by the IRS. You will have to file an amended income tax return in most cases.

Employee retention tax credit (ERC) can be claimed until Q3 2021 for businesses other than recovery startups & severely financially distressed employer. If your business qualifies as recovery startups or severely financially distressed employer , then you can be eligible for Q3 2021 & Q4 2021 Employee retention tax credit (ERC).

The lawmakers passed Infrastructure Act (Bipartisan Law) to restrict the businesses from claiming Employee retention tax credit (ERC) beyond Q4 2021. There are no signs for ERC to be extended for 2022 despite businesses are still struggling to get back with normal operations.

Yes, Non profit organizations are equally eligible as other for profit businesses to claim Employee retention tax credit (ERC).

Yes, even if you incorporated or started your business operations in 2020, you are still eligible for Employee retention tax credit (ERC) under normal eligibility route or recovery startup business.

Yes, employers who have availed PPP loan forgiveness are still eligible for Employee retention tax credit (ERC). However, no double dipping of payroll costs as declared on PPP loan forgiveness applications.

As per Constructive ownership rules, owners having more than 50% interest in the business are not eligible for Employee retention tax credit (ERC). However, other non related employees can still be eligible for Employee retention tax credit (ERC)

let's talk

about your next tax credit


    At IncenCred, we unravel tax complexities with unmatched expertise. From challenging IRS disputes to international tax intricacies and comprehensive accounting, our proven track record establishes us as leaders in tax consulting. We’re your partners in clarity, strategy, and success.

    Contact

    Filling Your Taxes


      This will close in 0 seconds