CA COVID-19 Regulatory Payroll Tax Credit for 2023 and 2024

CA SB 375 was introduced to the CA Senate in February 2023 and if passed would authorize an employer to claim, for the 2023 and 2024 calendar years, a COVID-19 regulatory compliance credit. And so, for an employer with 100 or more employees, the credit would be fifty dollars ($50) per employee and for an employer with less than 100 employees, one hundred dollars ($100) per employee.

The bill would require the credit to be claimed on the employer’s last quarterly return for 2023 and 2024 and requires any amount claimed by an employer to be credited against employee personal income tax withholding amounts required to be remitted to the department for the last quarter of the relevant calendar year.

This bill would not change the amount of personal income taxes required to be withheld from employees and required to be reported to the employee, the department, the Franchise Tax Board, and the Internal Revenue Service. The bill also specifies that its provisions do not require additional taxes to be paid by the employee or otherwise alter the employee’s tax liability under the Personal Income Tax Law. The bill would repeal its provisions on December 1, 2025.

As of June 6, 2023, the bill passed several committees by an overwhelming margin and is currently under review by the CA Senate Appropriations Committee. Check back here for updates.



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