Due to the repeal of the Enterprise Zone Program, California has enacted the New Employment Credit that may be taken against corporate income/franchise tax and personal income tax. This credit may be claimed by qualified taxpayers for qualified employees hired on or after Jan. 1, 2014, and for each taxable year until Jan. 1, 2021. To qualify for the credit, a Tentative Credit Reservation (TCR) from the California Franchise Tax Board is needed. A TCR, which may be requested online, equals 35% of the qualified wages paid for each qualified full-time employee hired, based on a net statewide increased number of full-time employees hired during the tax year over the base year. Essentially, a taxpayer could potentially be eligible for $56,000 or more of total credit per employee over a five-year period.
Download the PDF.