California Creates Refundable Tax Credit Worth up to $20,000 per Journalist

Key Highlights

• California has passed a new law that creates a tax credit of up to $20,000 per full-time employed journalist in a newsroom and $7,500 per part-time employed journalist for tax years 2027-2031.
• Newsrooms that expand may qualify for up to $15,000 in tax credits for each new full-time journalist added.
• If a newsroom owes less state income tax than what it would receive as a credit, it could receive the overage as a direct payment.
• Both nonprofit and for-profit newsrooms, including sole proprietorships, qualify.

Background

Governor Gavin Newsom signed Assembly Bill 2222 on September 30, 2026, which creates a refundable tax credit of up to $20,000 per qualifying journalist for local news outlets operating in California. The credit is available beginning tax year 2027 through 2031, and is fully refundable, meaning that if a newsroom owes less state income tax than what it would receive as a credit, it could receive the overage as a direct payment.

Credit Amounts

The tax credit is calculated per qualifying journalist, per taxable year, as follows:

• $20,000 for each of the first five qualifying journalists continuously employed on a full-time basis.
• $15,000 for each additional qualifying journalist continuously employed full-time beyond the first five.
• An additional $15,000 bonus for each qualifying journalist employed full-time in a new journalism position—defined as a net increase in the outlet's average daily headcount of qualifying journalists compared to the prior taxable year.
• $7,500 for each qualifying journalist employed on a part-time basis.

For example, if you are a newsroom that employs six full-time qualifying journalists and one part-time qualifying journalist in 2027 and hire one additional full-time journalist in 2028 while keeping the rest of your staffing the same, your tax credit for 2027 would be $122,500, and your tax credit for 2028 would be $137,500.

Who Qualifies?

The law covers three categories of newsrooms, including sole proprietorships. Each must produce original news coverage concerning local communities in California:

• Qualifying digital news outlets: outlets that publish news about California or a local California community at least monthly and can demonstrate—with digital subscriber or traffic data—that at least 33% of their audience is located in California.
• Qualifying broadcast stations: licensed in California by the FCC or a 501(c)(3) nonprofit that received a Corporation for Public Broadcasting community service grant before fiscal year 2025-26 or employs journalists on behalf of a university-licensed public broadcaster.
• Qualifying print publications: hold USPS periodicals mailing privileges, publish at least monthly, and either maintain their known office of publication in California or demonstrate at least 33% in-state print distribution. Alternatively, a newspaper of general circulation can be adjudicated by a California court under Government Code § 6008.

To be eligible, a news organization must:

• Be incorporated or registered to do business in California for at least 12 months prior to the start of the taxable year;
• Publicly disclose all beneficial owners if for-profit and all members of the board of directors if nonprofit;
• Carry active media liability insurance continuously for the tax year; and
• Maintain and publicly display an editorial policy for error correction and clarification, including an accessible process for reporting errors.

Newsrooms controlled by a disqualified organization such as a political action committee, political party, Section 527 organization, or a 501(c)(4) are not eligible for the tax credit.

What Is a "Qualifying Journalist"?

Under the statute, a "qualifying journalist" is an individual whose primary job duties occur in California and consist of gathering, preparing, producing, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news—including reporters, correspondents, photographers, videographers, editors, and digital producers—and who is a California resident.

• Full-time: at least 30 hours per week for more than 26 weeks, with annualized compensation of at least $35,000.
• Part-time: at least 20 but fewer than 30 hours per week for more than 26 weeks, with annualized compensation of at least $25,000.
• Continuously employed: employed full-time by the same qualified taxpayer in both the preceding and current taxable years.

What's Next and What Now?

Because the tax credit is new, the procedures to prove eligibility and claim the credit are not yet published. The California Franchise Tax Board is expected to publish additional guidance by January 1, 2028. Davis Wright Tremaine will monitor for any updates.

In the meantime, newsrooms can work to meet the eligibility requirements by:

• Ensuring they have active media liability insurance;
• Maintaining a publicly displayed error-correction policy;
• Disclosing beneficial ownership if for-profit or the board of directors if nonprofit;
• Documenting the location of your digital audience through analytics tools; and
• Ensuring all business registrations with the state of California are active.

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Davis Wright Tremaine LLP is the country's preeminent media law firm and has spent decades defending free expression, fighting for access to public records, and shaping the precedent that governs how news organizations operate. DWT advises newsrooms, broadcasters, digital publishers, and nonprofit news organizations on the full range of issues they face—from pre-publication and pre-broadcast review to defamation defense, reporter's privilege, public records access, intellectual property, content licensing, production financing, and regulatory compliance. The firm's lawyers have played a central role in many of the most important First Amendment cases in modern media law.

 Charles Lam is an associate, and Dan Laidman is a partner in DWT's Los Angeles office. For questions or more insights, please reach out to the authors or another member of our media and entertainment team. To stay informed, sign up for our alerts.