California creates a tax credit for newsrooms that hire local journalists, starting in 2027

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People working at desks in a large modern newsroom

California creates a tax credit for newsrooms that hire local journalists, starting in 2027

A state analysis estimated roughly 2,600 journalists at about 600 California news organizations could be covered. The law also changes how California treats executive-pay deductions.

By Alberto Zamudio | The Southbound 105 | Oct. 16, 2026

California will begin giving qualifying local news organizations a refundable tax credit for hiring and keeping journalists, under a law Gov. Gavin Newsom signed Sept. 30.

What the credit pays

Assembly Bill 2222, by Assemblymembers Christopher Ward, D-San Diego, and Buffy Wicks, D-Oakland, applies to tax years that begin on or after Jan. 1, 2027, and before Jan. 1, 2032, according to the Governor's office and the Franchise Tax Board's analysis. A qualifying outlet could receive:

  • $20,000 for each of its first five full-time qualifying journalists.
  • $15,000 for each full-time journalist beyond five.
  • An additional $15,000 for each full-time journalist in a new journalism position.
  • $7,500 for each qualifying part-time journalist.

The credit is refundable, meaning an outlet can receive money even if it owes no tax. Nonprofit newsrooms can claim it, too, according to the analysis.

Who would qualify

The Franchise Tax Board's analysis says a "local news outlet" can be a digital news outlet, a broadcast station or a print publication that produces original news about local communities in California. To qualify, an outlet must, among other requirements, be organized or registered in California for at least 12 months, publicly disclose its owners, carry active media liability insurance, and publicly display a policy for correcting errors. Outlets controlled by political action committees or certain social-welfare organizations are excluded.

A qualifying journalist must be a California resident whose primary job duties in the state involve gathering and publishing state or local news. Full-time means at least 30 hours a week for more than 26 weeks with annualized pay of at least $35,000. Part-time means 20 to under 30 hours a week with annualized pay of at least $25,000.

What it could cost

The analysis estimated that about 2,600 journalists work at roughly 600 local news organizations in California, and that the credits could reduce state revenue by about $40 million in the 2027 tax year. The bill also conforms California to federal limits on deducting executive pay above $1 million at publicly held corporations, which the analysis estimated would offset that cost with about $57 million. It put the net effect at a gain of about $17 million for 2027. These are estimates.

The credit is scheduled to be repealed Dec. 1, 2032. The Franchise Tax Board must report to the Legislature on how many taxpayers claimed it and how much was paid, beginning no later than April 1, 2029.

The politics

The Legislature passed the bill with Assembly approval of 63-10 in May, Senate approval of 30-10 and a final concurrence vote of 59-15 on Aug. 31, according to the analysis. Supporters included the California Newspaper Publishers Association and the California Broadcasters Association. Opponents included the California Chamber of Commerce and the California Taxpayers Association.

Newsom said in a statement that a free press "isn't supposed to make government comfortable. It's supposed to make government accountable."

What's next

  • Jan. 1, 2027: the first tax year covered by the credit begins.
  • By Jan. 1, 2028: the Franchise Tax Board must issue guidance for nonprofit news organizations claiming the credit.
  • April 1, 2029: the first required report to the Legislature on the credit's use.

Want more local news? Read more at The Southbound 105.

Cover photo: James Cridland, CC BY 2.0, via Wikimedia Commons.

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