California Governor Newsom, Senate President pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon recently announced that they have reached an agreement on a package of immediate actions to speed pandemic hardship relief to individuals, families and businesses.
Included in the relief package is a four-fold increase (from $500 million to more than $2 billion) for grants up to $25,000 for small businesses affected by COVID-19.
According to Newsom’s press release, “the agreement also partially conforms California tax law to new federal tax treatment for loans provided through the Paycheck Protection Plan, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. More than 750,000 PPP loans were taken out by California small businesses. This tax treatment would also extend to the Economic Injury Disaster Loans as well.”
In addition to providing tax relief for businesses, the agreement also offers cash relief to lower-income Californians; increases aid to small businesses; provides license renewal fee waivers to businesses impacted by the pandemic; commits additional resources for critical child care services; and funds emergency financial aid for community college students. For more details, click here to read full press release.
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