Discretionary Incentives

Featured Programs

California Competes Tax Credit

The California Competes Tax Credit (CCTC) is a discretionary tax incentive available to businesses that locate, expand, or remain in California. The incentive comes in the form of an income tax credit resulting from a tax credit agreement negotiated by the Governor’s Office of Business and Economic Development (GO-Biz) and approved by the California Competes Tax Credit Committee.

The amount of the credit awarded depends on each company’s unique set of factors, focused primarily on future capital investment, employment growth and economic impact to the state of California.

California Competes Tax Credit Highlights 

Credit awards vary in size, and some have been as low as $20,000 and as high as $6 million. All applicants compete against one another for a limited pool of funds with a special 25% allotment for small business (defined as a business with $2 million or less of gross receipts). Therefore, this program is applicable to businesses of all sizes.

 CCTC highlights include:

  • Credit against California income tax liability
  • Non-refundable credit
  • Six-year carryover

CCTC Application Periods and Funding Levels for fiscal year 2016-2017

  1. January 2,2017 through January 23, 2017 ($100 million available)
  2. March 6, 2017 through March 27, 2017 ($68.3 million plus any remaining unallocated amounts from the previous application periods)

Tentative Amount of Credits Available for fiscal Year 2017/2018

  • $200 million in fiscal year 2017/2018

CCTC Awards are based on 11 factors:

  1. Number of jobs created
  2. Compensation paid to employees
  3. Amount of investment
  4. Duration of proposed project and commitment to remain in the state
  5. Extent of unemployment or poverty in business area
  6. Extent the benefit to the state exceeds the amount of the tax credit
  7. Incentives available in other states
  8. Opportunity for future growth and expansion
  9. Other incentives available in California
  10. Overall economic impact
  11. Strategic importance to the state, region or locality
Steps To Secure California Competes Tax Credits

As part of securing the benefits, a business needs to estimate their information over a five-year period (filing year plus four subsequent tax periods) and follow these four steps in capturing any available benefits:

  1. Application (Phase 1): Determination of state return on investment
  2. Application (Phase 2): Consideration of various factors
  3. Agreement: Receive final tax credit agreement
  4. Reporting: Include credits on tax return

The cost-benefit ratio is a critical component that helps determine the return on investment for the state of California. ROI is one of the main considerations in determining whether an application passes the initial review to move from Phase 1 to Phase 2 of the application process.

  • Applications with the most advantageous cost-benefit ratio are moved to Phase 2
  • There is then a review of the top 200% of applicants for the California Competes Tax Credit

WOTC Tax Credit Calculator

All businesses that pay income tax in the U.S. qualify for the federal Work Opportunity Tax Credit (WOTC). To quickly estimate your company’s WOTC, fill out the fields below.

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