2026 Application Periods for California Competes Tax Credit by Christian J. Burgos, CMI, JD, LLM
Businesses in or relocating to California have two opportunities in 2026 to apply for more than $600 million in valuable California Competes Tax Credits (CCTC) that they may use over multiple years against the personal or corporate income taxes they pay to the state. The online application periods for fiscal year 2025-2026 are Jan. 5, 2026, through Jan. 26, 2026, and March 2, 2026, through March 16, 2026.
Background on the CCTC
Introduced by the California Governor’s Office of Business and Economic Development (GO-Biz) in 2013, the CCTC is a highly competitive program intended to help the state attract and retain growth-oriented companies that create new, high-quality, full-time jobs that would not otherwise exist. The credit itself may be used by selected companies against the personal or corporate income tax they must pay to the state’s Franchise Tax Board. Because the credit is nonrefundable, selected applicants may generally use it to reduce their state tax liability to zero (excluding any applicable minimum taxes), with any unused credits available to be carried forward for six years.
Applying for the CCTC online during one of the state-designated application periods is free and open to businesses of all sizes and in all industries that plan to remain, grow or relocate to California. While there are no minimum job creation or investment requirements to apply for the credit, GO-Biz will evaluate applicants based on a broad range of factors, including:
- The number of jobs the business expects to create or retain in this state,
- The compensation (i.e., wages and benefits) the business pays to its employees,
- The amount the business invests in the state,
- The extent of unemployment or poverty in the area where the business is located,
- The other incentives in and outside the state that are available to applicants,
- The duration of the business’s proposed business venture/project and its commitment to remain in this state,
- The overall economic impact of the applicant’s project or business on the state,
- The strategic importance of the business to the state, region or locality,
- The opportunity for future growth and expansion in this state by the business,
- The training opportunities provided to employees,
- The extent to which the anticipated benefit to the state exceeds the projected benefit to
- the business from the tax credit,
- The extent to which the credit will influence the applicant’s ability to create new full-time jobs in this state,
- The business’s commitment to treating workers fairly and creating quality, full-time, wage and salary jobs, and
- The extent to which the tax credit influences the applicant’s decision to relocate jobs to California from other states whose laws permit discrimination based on sexual orientation, gender identity, or gender expression, or interfere with women’s reproductive rights.
Evaluation Process
In phase one of the two-phase, three-month evaluation process, GO-Biz will assess applicants’ projects based on the cost-benefit ratio, which is the amount of credit requested divided by the sum of the applicants’ aggregate employee compensation and investment. Selected applicants will move on to phase two, which involves a deeper quantitative and qualitative evaluation of factors that include:
- the local unemployment and poverty levels in the proposed project location
- applicants’ ability to qualify for competing incentives in and outside of California
- the strategic importance of the proposed project in the state and local area
- the economic impact of the project
- the extent to which the applicant demonstrates that the credit will play a significant role in its willingness and ability to create new, quality, full-time jobs in California.
Companies considering an expansion in or to California should begin preparing now to apply for the CCTC during one of the two upcoming application periods: Jan. 5 through 26, 2026, and March 2 through 16, 2026. It will take time to gather the necessary documents, including prior tax year payroll records, details on projected job creation, salaries, benefits, and economic impact on the state. Working with experienced advisors and CPAs will go a long way toward helping applicants evaluate their CCTC eligibility, project estimated tax savings, and navigate the entire application and review process.
About the Author: Christian J. Burgos, CMI, JD, LLM, is a director of Tax Services with Berkowitz Pollack Brant, where he helps domestic and international clients navigate the complexities of state and local tax (SALT) compliance across the country. He can be reached at the CPA firm’s New York, NY, office (646) 213-7600 or info@bpbcpa.com.
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