As part of the assistance package that was announced by Governor Newsom in September 2020, the State of California is providing $500 million in grants to small businesses that are impacted by COVID-19. Small businesses with annual gross revenue of less than $2.5 million can receive up to $25,000 in the grant.
There will be two rounds of grants. CDTFA will start taking applications for the first round on December 30, 2020, and will close on January 8, 2021. Notifications on Round 1 awards will begin as soon as January 13, 2021. Round 2 will be announced at a later date. However, businesses do not need to submit separate applications. Applications submitted for the first round will automatically be rolled over into the second round.
Amount of the Grant
The amount of grant funding ranges from $5,000 to $25,000. Businesses are eligible based on their annual revenue as reported in their most recent tax return:
|Eligible Businesses Annual Revenue||Grant Amount Available Per Business|
|$1,000 to $100,000||$5,000|
|Greater than $100,000 up to $1,000,000||$15,000|
|Greater than $1,000,000 up to $2,500,000||$25,000|
A small business must satisfy the following criteria to be eligible to receive a grant award:
- Must meet the definition of an “eligible small business.” An “eligible small business” means a small business or small nonprofit that has yearly gross revenue between $1,000 to $2.5 million (based on most recently filed tax return). The business can be in the form of a sole proprietorship, C corporation, S corporation, partnership, or LLC.
- Active businesses or nonprofits operating since at least June 1, 2019.
- Businesses must currently be operating or have a clear plan to re-open once the State of California permits the re-opening of businesses.
- Business must be impacted by COVID-19 and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic.
- Businesses must be able to provide organizing documents (see Required Documents below).
- Businesses must be able to provide an acceptable form of government-issued photo ID.
- Applicants with multiple business entities, franchises, locations, etc. are not eligible for multiple grants and are only allowed to apply once using their eligible small business with the highest revenue
Required Documents for Application
Businesses will need the following items for the submission of application:
- 2018 or 2019 tax returns (for businesses) or Form 990s (for nonprofits), and
- Copy of official filing with the California Secretary of State, if applicable, or local municipality for the business such as one of the following: Articles of Incorporation, Certificate of Organization, Fictitious Name of Registration, or Government-Issued Business License.
Once applications open, small businesses and nonprofits may apply directly through CAReliefGrant.com.
For more information, please visit CAReliefGrant.com.
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About the Author
So Sum Lee, CPA, Principal
Tax, Real Estate, Technology, Hospitality
So Sum Lee, CPA is a Tax Principal at KROST. So Sum has over 18 years of experience in public accounting and has a wide range of experience in Taxation, as well as servicing high-net-worth clients. So Sum’s area of expertise includes industries such as wholesale, Real Estate investments, and Restaurants. » Full Bio