About this programme
The California Competes Tax Credit (CCTC) is a discretionary, negotiated income tax credit for businesses that want to locate in California or stay and grow there. It's administered by the Governor's Office of Business and Economic Development (GO-Biz) and awarded by the statutorily created California Competes Tax Credit Committee, which includes the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each from the Speaker of the Assembly and the Senate Committee on Rules.
Any business, of any size, industry, or location within California, can apply. There are no sector or geographic restrictions, though the programme's stated purpose is to attract and retain high-value employers in industries with high economic multipliers that pay good wages and benefits. About $180 million in credits is allocated each fiscal year from 2018-19 through 2032-33, split across three application periods a year.
Unlike an automatic statutory credit, CCTC is competitive and negotiated: businesses apply for a specific credit amount tied to a five-year plan of new full-time jobs and investment in California, GO-Biz evaluates and negotiates the terms, and the Committee approves (or doesn't) the resulting tax credit agreement. Each agreement carries its own job-creation and investment milestones, and the credit is claimed over time against California income tax as those milestones are met.
Because the credit is competitive, not every qualified applicant is funded in a given period — allocation is capped and applications are ranked. A business that isn't awarded a credit can revise and resubmit in a later application period, and there's no limit on how many times a business can apply or be awarded credits over time as it keeps growing.
How it works
Evaluation runs in two phases over roughly three months from application to award. Phase I is purely quantitative: GO-Biz calculates a cost-benefit ratio for each application — the credit amount requested divided by the sum of the applicant's proposed aggregate employee compensation and aggregate investment over the five-year project period. Applications with the lowest (most favourable) ratios advance; historically only the applications offering the most jobs/investment per dollar of credit requested move on, and the cutoff ratio varies every period based on that period's applicant pool (it is not a fixed, published threshold).
Two ways bypass the Phase I ratio cutoff and move an application straight to Phase II regardless of ratio: (1) the applicant's CEO, President, CFO, or equivalent certifies that absent the credit, the project may occur in another state or the applicant may terminate or relocate employees to another state; or (2) at least 75% of the applicant's proposed net increase in full-time employees will work at least 75% of the time in a California city or county on GO-Biz's official high-unemployment/high-poverty list for that application period.
Phase II is a deeper quantitative and qualitative review. GO-Biz weighs local unemployment/poverty levels at the project site, the applicant's access to competing incentives in and outside California, the strategic importance of the project to the state or region, industry outlook, workforce-treatment factors (training/apprenticeship programmes, labor-management letters of support, safety and compliance history), and how much the credit will actually influence the applicant's decision to create the jobs. Letters of support from local government, while not required, are considered here.
If approved, GO-Biz negotiates a written tax credit agreement with the applicant specifying yearly job, wage, and investment milestones over a five-year window (plus a further three-year retention period for jobs already credited). The credit is non-refundable and applies only to California income tax owed to the Franchise Tax Board; unused credit carries forward up to six years. Every agreement includes a recapture provision — if the business fails to meet or maintain its committed milestones, GO-Biz can disallow use of the credit or require repayment of credit already claimed. The Franchise Tax Board separately reviews compliance during the term of the agreement.
Who can apply
Any business — any size, from any industry, anywhere in California — may apply; there's no minimum job-creation requirement and no sector or geographic carve-out or exclusion. Businesses that have already received a CCTC award in a prior period can apply again for additional job growth and investment.
The applicant must be proposing a genuine project — a business venture, investment, or expansion in California — that creates new, full-time (35+ hours/week average) W-2 jobs, or in narrower cases proposes a California retention-only project (no new jobs, existing jobs at risk of leaving). New part-time hires don't count toward job requirements, even combined.
Applicants requesting a credit must request a minimum of $20,000 in total credit for the full five-year project (the statutory maximum any single applicant can request is 20% of that fiscal year's total allocation). There's no fee to apply.
For determinations from the 2023-24 fiscal year onward, GO-Biz may additionally weigh whether the applicant is relocating jobs into California from a state that has enacted laws rolling back LGBTQ+ anti-discrimination protections or restricting reproductive rights — this can work in the applicant's favour as an evaluation factor, not a bar to eligibility.
How to apply
- Applications are submitted online, not by mail or email, at www.calcompetes.ca.gov, during one of three fixed application periods GO-Biz publishes each fiscal year (dates and the specific application-period notice are posted on the official CCTC page).
- Create an account with your name, phone number, and email — each login requires a fresh six-digit access key emailed to you (valid 30 minutes), so use an email address you monitor closely and add noreply@calcompetes.ca.gov to your safe-senders list.
- Start an application by entering the applicant's legal business name, current taxable year, and accounting-period end date, then work through the application's eleven sections: Contact Information, Business Information, Business Structure, Proposed Project, Project Locations, Employees, Investment, Ownership, Incentives and Programs, Litigation and Violations, and Consultant Questions.
- In the Proposed Project section, write a 1,000–7,000 character narrative explaining what the business does, who its customers are, and specifically how the credit amount requested will enable or incentivize the proposed California expansion or retention — GO-Biz reviewers use this narrative directly in scoring.
- Enter projected full-time headcount, wages, and investment for the current tax year plus four subsequent tax years; the system auto-calculates your aggregate employee compensation, aggregate investment, and resulting Phase I cost-benefit ratio.
- Mark every section "Complete" — the Submit button only activates once all eleven sections show Complete. You can recall and amend a submitted application any time before that period's deadline, and print a PDF copy via the Report button for your records.
- If moved to Phase II, GO-Biz will request additional detail (signed declarations if you claimed a ratio exemption, investment cost breakdowns, litigation/violation detail, etc.) and may negotiate directly on the proposed credit amount and milestones before the case goes to the Committee for approval.
- If not awarded, you can copy your application (via Options → Copy on the Application Summary screen) into a later application period rather than starting over — you'll need to update the Employees, Investment, and Current Tax Year sections to reflect the new period.
Documents you’ll typically need
- Payroll records for full-time employees for the applicant's most recently completed tax year (used for the mandatory base-year calculation — this must be actual figures, not estimates)
- A projected five-year business plan: new full-time employees by job classification, wages, and hire timing, plus attrition/reduction assumptions
- Projected investment in real property (land, buildings, structures, integrated equipment) and personal property (equipment, vehicles, software licenses, other depreciable business assets) tied to the project
- Litigation and regulatory history for the applicant and any 25%+ owner: pending/resolved material litigation, CEQA litigation, and any state/federal labor, OSHA, environmental, or tax-lien violations, citations, fines, or penalties in the last 10 years
- Ownership disclosure for any person or entity holding 25% or more of the applicant
- Disclosure of any consultant or third party paid a fee to assist with the application, and the nature of that fee arrangement
- If claiming a Phase I ratio exemption: a signed declaration from the CEO, President, CFO, or equivalent officer
Frequently asked
Is there a minimum number of jobs we have to create to qualify?
No statutory minimum — but because the credit is awarded competitively, an application proposing very few jobs relative to the credit requested will usually score poorly on the Phase I cost-benefit ratio and may not advance. The program's core intent is incentivizing high-quality, full-time job creation.
What is the minimum and maximum credit we can request?
The minimum total credit request is $20,000 for the full five-year project. The maximum for any single applicant is 20% of the total credit allocated for that fiscal year (roughly $180 million/year, so up to about $36 million, though the exact cap shifts with the year's allocation).
Is there a fee to apply?
No. GO-Biz charges no fee to submit a California Competes Tax Credit application.
What's the difference between Phase I and Phase II evaluation?
Phase I is a pure numbers screen: your requested credit divided by your combined projected aggregate employee compensation and investment (the cost-benefit ratio). Applications with the most favourable ratios advance, unless you qualify for one of the two automatic exemptions (an absent-award relocation certification, or 75%+ of new hires in a high-unemployment/high-poverty area). Phase II is a deeper quantitative and qualitative review covering local economic conditions, competing incentives, strategic importance, industry outlook, and workforce practices.
What happens if we win the credit but then fall short on hiring or investment?
Every CCTC agreement includes a recapture provision. If you fail to meet or maintain the job-creation, wage, or investment milestones specified in your negotiated agreement, GO-Biz can disallow further use of the credit or require repayment of credit already claimed. Reducing your hiring projections by more than 5% at the written-agreement stage can also get an application rejected before an agreement is even signed.
Can we apply if we already have a lease or site picked out — or do we need one?
You don't need a signed lease or purchase agreement to apply. You should have a general sense of the California location, since it factors into Phase II evaluation, and be able to describe how you plan to finance and secure the facility.
How is the credit actually used against our taxes?
CCTC only offsets California income/franchise tax owed to the Franchise Tax Board — it's non-refundable, meaning it can't create a cash refund beyond your tax liability. If the allowed credit exceeds tax due in a year, the excess carries forward for up to six years until used up. Your specific agreement sets out when and how much can be claimed each year.
Does a California Competes application count as a public record I can be asked to disclose?
GO-Biz is subject to the California Public Records Act, but Revenue and Taxation Code §19542 specifically shields your application and application materials from disclosure. If you're awarded a credit, the law does require GO-Biz to publish limited summary information: your name, estimated investment, estimated jobs created/retained, credit amount, any recaptured amount, primary project location, and whether you received high-unemployment/high-poverty priority.
Reviewed 2026-08-16. Programmes change — confirm current eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private consultancy and is not affiliated with any government authority.