Main Street Small Business Tax Credit Special Instructions for Sales and Use Tax Filers
Your Main Street Small Business Tax Credit will be available on April 1, 2021. You will be able to apply your credits against your sales and use tax liabilities for reporting periods starting with returns originally due on April 30, 2021, and subsequent returns, until they are exhausted or until April 30, 2026, whichever comes first. Remaining credits cannot be refunded.
I received my confirmation for a tentative credit amount. Where can I see my credit balance?
Your credits will be posted in your California Department of Tax and Fee Administration (CDTFA) online services account. To view your credit balance, you must log in using your username and password and select your eligible sales and use tax account. Proceed to the I Want to launchpad, select More, then click on View 2020 Main Street Small Business Tax Credit Balance.
How do I apply my tax credits to amounts due on my return?
When you file your tax return, you will subtract your available credits from the tax due, excluding penalty and interest, to determine the amount of payment you need to make. (There will not be a separate line for the credits on your return.) If your credits do not cover the total tax amount due, you must pay the remaining tax balance. If your credits meet or exceed the total tax amount due, no payment is required. You may continue to use the remaining credits for subsequent filing periods until they are exhausted, or until April 30, 2026, whichever comes first. If you have an extension, please see below.
- Quarterly Filers. Your credits must be applied to taxes due and payable for the quarter beginning on January 1, 2021, and ending on March 31, 2021, on the return originally due on April 30, 2021.
- If you are required to make prepayments, credits may be applied to prepayments beginning in the first quarter of 2021. If your available credits are sufficient to fulfill the prepayment amount due, there is no need to submit an additional payment. If your remaining available credits are less than the prepayment amount due, then you must pay the remaining prepayment balance.
When filing your quarterly return, enter the prepayment amounts for that quarter, including amounts fulfilled with tax credits.
- If you are required to make prepayments, credits may be applied to prepayments beginning in the first quarter of 2021. If your available credits are sufficient to fulfill the prepayment amount due, there is no need to submit an additional payment. If your remaining available credits are less than the prepayment amount due, then you must pay the remaining prepayment balance.
- Monthly Filers. Your credits must be applied to taxes due and payable for the month beginning on March 1, 2021, and ending on March 31, 2021, on the return originally due on April 30, 2021.
- Annual, Fiscal Year, or any other reporting basis filers. Your credits must be applied to taxes due and payable on the first return originally due on or after April 30, 2021.
I am required to make payments by Electronic Funds Transfer (EFT). Will I be penalized if my credits are used to fulfill my prepayments or return payment?
If credits are used to fully pay your liability, including prepayments, you will not be assessed a penalty. However, if the credits are insufficient to fulfill the tax amount due, you must pay your remaining balance by EFT.
Can I use my tax credits on returns that qualify for a filing extension?
Credits may only be used on returns with an original due date of April 30, 2021 through April 30, 2026. For example, many taxpayers received an extension to file their fourth quarter 2020 return by April 30, 2021. Since the original due date for this return is January 31, 2021, credits may not be used towards your fourth quarter 2020 tax amounts due.
You are encouraged to file your return with an original due date of April 30, 2021, even though you received an extension, if your available credits satisfy the return tax amount due. If your credit amount does not fully satisfy the tax amount due, you are still encouraged to file your return by the original due date and pay the balance due by the extended due date.
For more information on extensions, please visit our extension to file and pay page.
For More Information
Please visit our Main Street Small Business Tax Credit page and review the Frequently Asked Questions for additional information.
You may also contact our Customer Service Center at 1-800-400-7115 (CRS:711) Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays.