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California businesses with 20 or fewer employees should be aware that the state provides a $3,000 tax credit for each additional full-time employee hired during 2009. The credit applies to hourly wage employees averaging at least 35 hours per week and full-time (at least 40 hours per week) salaried employees. An employer will not qualify for the credit unless it has a net increase in full-time employees compared to its number of full-time employees for 2008.

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Given that it seems like almost every company is a possible bankruptcy debtor these days, it is important to recognize that money paid by a company that ends up in bankruptcy might be subject to disgorgement. In other words, if you are the recipient of such a payment, you might have to give the money (or part of the money) back.

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In 2007, California enacted legislation to address the unconstitutionality of the CA LLC fee based on gross receipts assessed on LLCs doing business in California. The legislation amends CA Rev. & Tax. Code §17942, effective for tax years beginning on or after January 1, 2007, to limit the amount of gross receipts subject to the fee to only those gross receipts generated from CA sources. The legislation also limits the amount of refunds that may be claimed for fees assessed in prior years. Refunds are limited to the amount by which the fee paid, plus any interest assessed, exceeds the amount of the fee that would have been assessed if the fee had been determined under Section 17942, as amended in 2007 (limits refunds to only the excess paid on account of unfair apportionment).

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