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Tag: California tax
Enterprise Zone Hiring Credit Revival: Relevant for 2025?
Introduction For years, California’s Enterprise Zone Hiring Credit helped businesses reduce state tax by hiring from targeted groups. Although the program expired in 2014, talk of revival bills and local variants in 2025 is back on the table. This guide explores the current status of the credit, proposed changes, and how startup founders and employers […]
New Energy Credits for California Data Centers
Introduction In 2025, California is making another bold move toward clean tech. A newly proposed bill offers green energy tax credits for data centers, specifically targeting companies that adopt solar, battery storage, and AI cooling systems. This blog explores the proposed California Clean Infrastructure Act of 2025, who qualifies, how to claim these credits, and […]
California 409A Valuation Discounts: State Tax Footnotes Investors Read
Introduction If you’re a California startup issuing stock options, your 409A valuation isn’t just a federal concern. The Franchise Tax Board (FTB) scrutinizes how discounts and FMV are reported for state tax purposes too. In 2025, with more investors reviewing state-level footnotes and tax risks, understanding how CA treats 409A discounts can impact cap tables, […]
S-Corp Reasonable Compensation: Avoiding FTB Audits
Introduction If you own an S-Corporation in California, the Franchise Tax Board (FTB) is watching how you pay yourself. In 2025, FTB and IRS audits are increasingly focused on reasonable compensation especially for founder-only businesses. Paying yourself too little (or nothing) can lead to back payroll taxes, penalties, and misclassification audits. This guide explains what […]
California Alternative LLC Structures: B-Corp & Social-Purpose Corp Taxes
Introduction In 2025, California offers more than traditional LLCs and C-Corps. Alternative legal structures like Benefit Corporations (B-Corps) and Social Purpose Corporations (SPCs) provide mission-driven businesses with the flexibility to pursue impact and profit. But what about taxes? This guide breaks down the Franchise Tax Board (FTB) treatment of B-Corps and SPCs in California, comparing […]
Payroll R&D Credit: Why the CA Program Is Capped
Introduction Startups across the U.S. leverage the federal payroll R&D credit to offset up to $500,000 in employer-side payroll taxes. But what about California? In 2025, California still does not allow R&D credits to offset payroll tax, and its overall research credit program is non-refundable and capped for corporations. This guide explains why CA R&D […]
California R&D Credit vs. Federal: Can Founders Double-Dip?
Introduction Founders often ask: “Can I claim the R&D credit at both federal and California levels?” In 2025, the answer is yes but with key differences in calculation, rules, and refundability. In this blog, we compare the California Research Credit with the Federal R&D Credit under IRC §41 and guide founders on how to maximize […]
QSBS & California: 0% State Exclusion? Myth-Busting the Rules
Introduction You may have heard that Qualified Small Business Stock (QSBS) offers a 0% tax rate, but in California, this is where myths and reality diverge sharply. In this 2025 guide, we’ll unpack whether California honors IRC §1202 exclusions, how state sourcing affects your gain, and what founders need to know about myth-busting QSBS treatment […]
California 409A Valuation Discounts: State Tax Footnotes Investors Read
Introduction Your startup’s 409A valuation isn’t just about issuing stock options it’s a due diligence magnet for investors and auditors alike. But here’s the twist for 2025: California investors are combing through state tax footnotes, especially for valuation discounts. In this guide, we cover how 409A valuation discounts affect California state tax reporting and how […]
California’s Estate & Inheritance Taxes: Who Pays & How Much? (2025 Edition)
Introduction If you live in California or inherit assets from someone who did, you may wonder whether estate or inheritance taxes apply. While California has no estate or inheritance tax, large estates may still be subject to federal estate tax and other income tax consequences. Here’s what you need to know in 2025. Does California […]