Tax Credits

Tax credits can help you move here – and grow.

Small businesses wanting to come to California or stay and grow in California may be eligible for the “California Competes” income tax credit.  Tax credit agreements are negotiated by GO-Biz (the Governor's Office of Business and Economic Development) and approved by the California Competes Tax Credit Committee consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Speaker of the Assembly and Senate Committee on Rules. 

California Competes Tax Credit Application Periods for Fiscal Year 2016 - 2017

Small Business Health Care Tax Credit and the SHOP Marketplace​

If you are a small employer, there is a tax credit that can put money in your pocket.

The small business health care tax credit benefits employers that:

• Have fewer than 25 full-time equivalent employees

• Pay an average wage of less than $50,000 a year

• Pay at least half of employee health insurance premiums

To be eligible for this credit, you must have purchased coverage through the small business health options program, also known as the SHOP marketplace.

SHOP Marketplace

Tax Exempt Financing for Manufacturers

Manufacturers and certain research and developers may qualify for a partial exemption of sales and use tax on certain manufacturing and research and development equipment purchases and leases. To be eligible for this partial exemption, you must meet all three of these conditions:

• Be engaged in certain types of business, also known as a "qualified person."

• Purchase "qualified property"

• Use that qualified property for the uses allowed by the law.

Manufacturing and Research & Development Exemption

Returning Heroes and Wounded Warrior Tax Credit

The Returning Heroes Tax Credit is a new hiring tax credit that incentivises firms to hire unemployed veterans.

Veteran's Tax Credit

New Employment Credit Reservation

To be eligible for the New Employment Credit, a qualified taxpayer must obtain a tentative credit reservation from Franchise Tax Board for each qualified employee. The employer must receive the credit reservation within 30 days of completing the new hire reporting requirement with Employment Development Department.

State of California New Employment Credit Reservation

• To promote the hiring of individuals who qualify as a member of a target group.

• To provide a federal tax credit to employers who hire these individuals.

The Employment Development Department is the WOTC verifying agency for California employers.

Work Opportunity Tax Credit

Property Assessed Clean Energy (PACE) loss Reserve Program

The PACE Program works with partners and lenders to make affordable financing available for home, commercial and small business improvements that will reduce energy use or promote water conservation.

PACE Program

Opportunity Zones

Opportunity Zones are a new community development program established by Congress in the Tax Cuts and Jobs Act of 2017 to encourage long-term investments in low-income urban and rural communities nationwide. The Opportunity Zones program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into Opportunity Zones designated by the chief executives of every U.S. state and territory.

Opportunity Zones