Today's Law As Amended


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AB-1195 Personal income and corporation taxes: hiring credit.(2011-2012)



As Amends the Law Today


SECTION 1.

 Section 17053.80 of the Revenue and Taxation Code, as added by Section 3 of Chapter 10 of the 3rd Third Extraordinary Session of the Statutes of 2009, is repealed.

17053.80.
 (a) (1) For each taxable year beginning on or after January 1, 2022, and before January 1, 2027, there shall be allowed to a qualified taxpayer that employs an eligible individual a credit against the “net tax,” as defined in Section 17039, an amount as determined pursuant to paragraph (2), not to exceed thirty thousand dollars ($30,000) per taxpayer per taxable year.
(2) A qualified taxpayer shall be allowed the credit pursuant to this section in the following amounts per taxable year:
(A) Two thousand five hundred dollars ($2,500) for each eligible individual that works at least 500 hours, but fewer than 1,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
(B) Five thousand dollars ($5,000) for each eligible individual that works at least 1,000 hours, but fewer than 1,500 hours, for the eligible employer during the taxable year in which the credit is claimed.
(C) Seven thousand five hundred dollars ($7,500) for each eligible individual that works at least 1,500 hours, but fewer than 2,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
(D) Ten thousand dollars ($10,000) for each eligible individual that works at least 2,000 hours for the eligible employer during the taxable year in which the credit is claimed.
(b) For purposes of this section:
(1) “Continuum of care” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations.
(2) “Coordinated entry system” means a centralized or coordinated assessment system developed pursuant to Section 578.7 of Title 24 of the Code of Federal Regulations, designed to coordinate homelessness program participant intake, assessment, and provision of referrals.
(3) “Eligible employer” means a taxpayer that meets all of the following requirements:
(A) Pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(B) Pays at least 120 percent of minimum wage.
(C) Provides to the Franchise Tax Board, upon request, a copy of the certification received for each eligible individual for each tax year that the credit is claimed for that eligible individual by that eligible employer.
(4) “Eligible individual” means a person who meets both of the following criteria:
(A) The person is homeless or has received supportive services from a homeless services provider, as designated by a local continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, on the date of the hire or anytime during the 180-day period immediately before the hire.
(B) The person has been issued a certification pursuant to paragraph (2) of subdivision (c), and that certification has not expired.
(5) “Homeless Management Information System” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations. “Homeless Management Information System” includes the use of a comparable database by a victim services provider or legal services provider that is permitted by the federal government under Part 576 (commencing with Section 576.1) of Title 24 of the Code of Federal Regulations.
(6) “Person is homeless” means the same as “homeless” as defined in Section 578.3 of Title 24 of the Code of Federal Regulations.
(7) “Minimum wage” means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(8) “Qualified taxpayer” means an eligible employer that pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code to an eligible individual.
(c) (1) A credit shall not be allowed under this section unless the eligible employer submits to the Franchise Tax Board, upon request, a certification issued by a continuum of care, or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, or other program as specified by the Franchise Tax Board.
(2) A continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, shall issue certifications for eligible individuals.
(3) The certification pursuant to paragraph (2) shall be issued in a form and manner prescribed by the Franchise Tax Board.
(4) A certification issued pursuant to this subdivision shall expire one year after issuance.
(5) An eligible individual may receive a new certification pursuant to this subdivision if they are homeless or have received supportive services from a homeless services provider, as designated by a local continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, on the date that the eligible individual receives a new certification or anytime during the 180-day period immediately before that date.
(d) (1) The total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers pursuant to this section and Section 23629 shall not exceed thirty million dollars ($30,000,000), plus the unallocated credit amount, if any, from the preceding calendar year.
(2) (A) To be eligible for the credit allowed by this section with respect to an eligible individual, a qualified taxpayer shall request a credit reservation from the Franchise Tax Board, in the form and manner prescribed by the Franchise Tax Board, consistent with either of the following, as applicable:
(i) Within 30 days of hiring an eligible individual.
(ii) Within 60 days of receiving a new certification pursuant to paragraph (5) of subdivision (c).
(B) To obtain a credit reservation with respect to an eligible individual, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, how many hours the eligible individual is expected to work for the next 12 months, and the start date of employment.
(3) The Franchise Tax Board shall do both of the following:
(A) Approve a tentative credit reservation with respect to an eligible individual.
(B) Subject to the annual cap established as provided in paragraph (1), allocate an aggregate amount of credits under this section and Section 23629, and allocate any carryover of unallocated credits from prior years.
(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding two years if necessary, until the credit is exhausted.
(f) If the credit allowed by this section is claimed by the qualified taxpayer, a deduction otherwise allowed under this part for any amount of wages paid or incurred by the qualified taxpayer as a trade or business expense to an eligible individual shall be reduced by the amount of the credit allowed by this section.
(g) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(h)  This section shall remain in effect only until December 1, 2027, and as of that date is repealed.

SEC. 2.

 Section 17053.80 of the Revenue and Taxation Code, as added by Section 3 of Chapter 17 of the 3rd Third Extraordinary Session of the Statutes of 2009, is amended to read:

17053.80.
 (a) (1)  For each taxable year beginning on or after January 1, 2022, and before January 1, 2027,  2009,  there shall be allowed to a qualified taxpayer that employs an eligible individual a  as a  credit against the “net tax,” as defined in Section 17039, an amount as determined pursuant to paragraph (2), not to exceed thirty thousand dollars ($30,000) per taxpayer per taxable year. three thousand dollars ($3,000) for each net increase in qualified full-time employees, as specified in subdivision (c), hired during the taxable year by a qualified employer. 
(2) A qualified taxpayer shall be allowed the credit pursuant to this section in the following amounts per taxable year:
(A) Two thousand five hundred dollars ($2,500) for each eligible individual that works at least 500 hours, but fewer than 1,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
(B) Five thousand dollars ($5,000) for each eligible individual that works at least 1,000 hours, but fewer than 1,500 hours, for the eligible employer during the taxable year in which the credit is claimed.
(C) Seven thousand five hundred dollars ($7,500) for each eligible individual that works at least 1,500 hours, but fewer than 2,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
(D) Ten thousand dollars ($10,000) for each eligible individual that works at least 2,000 hours for the eligible employer during the taxable year in which the credit is claimed.
(b) For purposes of this section:
(1) “Continuum of care” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations. “Acquired” includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration. 
(2) “Qualified full-time employee” means:
(A) A qualified employee who was paid qualified wages during the taxable year by the qualified employer for services of not less than an average of 35 hours per week.
(B) A qualified employee who was a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified employer.
(3) A “qualified employee” shall not include any of the following:
(A) An employee certified as a qualified employee in an enterprise zone designated in accordance with Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1 of the Government Code.
(B) An employee certified as a qualified disadvantaged individual in a manufacturing enhancement area designated in accordance with Section 7073.8 of the Government Code.
(C) An employee certified as a qualified employee in a targeted tax area designated in accordance with Section 7097 of the Government Code.
(D) An employee certified as a qualified disadvantaged individual or a qualified displaced employee in a local agency military base recovery area (LAMBRA) designated in accordance with Chapter 12.97 (commencing with Section 7105) of Division 7 of Title 1 of the Government Code.
(E) An employee whose wages are included in calculating any other credit allowed under this part.
(2) (4)  “Coordinated (A)   entry system” means a centralized or coordinated assessment system developed pursuant to Section 578.7 of Title 24 of the Code of Federal Regulations, designed to coordinate homelessness program participant intake, assessment, and provision of referrals. For taxable years beginning on or after January 1, 2009, and before January 1, 2011, “qualified employer” means a taxpayer that, as of the last day of the preceding taxable year, employed a total of 20 or fewer employees. 
(3) (B)  “Eligible  For taxable years beginning on or after January 1, 2011, “qualified  employer” means a taxpayer that meets all of the following requirements: that, as of the last day of the preceding taxable year, employed a total of 50 or fewer employees. 
(A) (5)  Pays  “Qualified wages” means  wages subject to withholding under  Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(B) Pays at least 120 percent of minimum wage.
(C) Provides to the Franchise Tax Board, upon request, a copy of the certification received for each eligible individual for each tax year that the credit is claimed for that eligible individual by that eligible employer.
(4) (6)  “Eligible individual” means a person who meets both of the following criteria: “Annual full-time equivalent” means either of the following: 
(A) In the case of a full-time employee paid hourly qualified wages, “annual full-time equivalent” means the total number of hours worked for the taxpayer by the employee (not to exceed 2,000 hours per employee) divided by 2,000.
(B) In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the taxpayer by the employee divided by 52.
(A) (c)  The person is homeless or has received supportive services from a homeless services provider, as designated by a local continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, on the date of the hire or anytime during the 180-day period immediately before the hire. net increase in qualified full-time employees of a qualified employer shall be determined as provided by this subdivision: 
(1) (A) The net increase in qualified full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B).
(B) The person has been issued a certification pursuant to paragraph (2) of subdivision (c), and that certification has not expired. total number of qualified full-time employees employed in the preceding taxable year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. 
(5) “Homeless Management Information System” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations. “Homeless Management Information System” includes the use of a comparable database by a victim services provider or legal services provider that is permitted by the federal government under Part 576 (commencing with Section 576.1) of Title 24 of the Code of Federal Regulations.
(6) “Person is homeless” means the same as “homeless” as defined in Section 578.3 of Title 24 of the Code of Federal Regulations.
(7) “Minimum wage” means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(8) “Qualified taxpayer” means an eligible employer that pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code to an eligible individual.
(c) (1) A credit shall not be allowed under this section unless the eligible employer submits to the Franchise Tax Board, upon request, a certification issued by a continuum of care, or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, or other program as specified by the Franchise Tax Board.
(2) A continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, shall issue certifications for eligible individuals.
(3) The certification pursuant to paragraph (2) shall be issued in a form and manner prescribed by the Franchise Tax Board.
(4) A certification issued pursuant to this subdivision shall expire one year after issuance.
(5) An eligible individual may receive a new certification pursuant to this subdivision if they are homeless or have received supportive services from a homeless services provider, as designated by a local continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, on the date that the eligible individual receives a new certification or anytime during the 180-day period immediately before that date.
(d) (C)  (1)  The total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers pursuant to this section and Section 23629 shall not exceed thirty million dollars ($30,000,000), plus the unallocated credit amount, if any, from the preceding calendar  number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable  year.
(2) (A) For  To be eligible for the credit allowed by this section with respect to an eligible individual, a qualified taxpayer shall request a credit reservation from the Franchise Tax Board, in the form and manner prescribed by the Franchise Tax Board, consistent with either of the following, as applicable:  taxpayers that first commence doing business in this state during the taxable year, the number of full-time employees for the immediately preceding prior taxable year shall be zero. 
(i) Within 30 days of hiring an eligible individual.
(ii) Within 60 days of receiving a new certification pursuant to paragraph (5) of subdivision (c).
(B) To obtain a credit reservation with respect to an eligible individual, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, how many hours the eligible individual is expected to work for the next 12 months, and the start date of employment.
(3) The Franchise Tax Board shall do both of the following:
(A) Approve a tentative credit reservation with respect to an eligible individual.
(B) Subject to the annual cap established as provided in paragraph (1), allocate an aggregate amount of credits under this section and Section 23629, and allocate any carryover of unallocated credits from prior years.
(e) (d)  In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable  year, and succeeding two seven  years if necessary, until the credit is exhausted.
(f) (e)  If the credit allowed by this section is claimed by the qualified taxpayer, a  Any  deduction otherwise allowed under this part for any amount of wages paid or incurred by the qualified taxpayer as a trade or business expense to an eligible individual shall  qualified wages shall not  be reduced by the amount of the credit allowed by under  this section.
(f) For purposes of this section:
(1) All employees of the trades or businesses that are treated as related under either Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.
(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276.20, without application of paragraph (7) of that subdivision, shall apply.
(g) (1) (A) Credit under this section shall be allowed only for credits claimed on a timely filed original return received by the Franchise Tax Board on or before the cut-off date established by the Franchise Tax Board.
(B) For purposes of this paragraph, the cut-off date shall be the last day of the calendar quarter within which the Franchise Tax Board estimates it will have received timely filed original returns claiming credits under this section and Section 23623 that cumulatively total four hundred million dollars ($400,000,000) for all taxable years.
(2) The date a return is received shall be determined by the Franchise Tax Board.
(3) (A) The determinations of the Franchise Tax Board with respect to the cut-off date, the date a return is received, and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination under this subdivision, including the application of the limitation specified in subparagraph (B) of paragraph (1), shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from such disallowance may be assessed by the Franchise Tax Board in the same manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on its Internet Web site with respect to the amount of credit under this section and Section 23623 claimed on timely filed original returns received by the Franchise Tax Board.
(h) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the limitation on total credits allowable under this section and Section 23623 and guidelines necessary to avoid the application of paragraph (2) of subdivision (f) through split-ups, shell corporations, partnerships, tiered ownership structures, or otherwise.
(g) (2)  The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section.  Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall does  not apply to any rule, guideline, or procedure prescribed  standard, criterion, procedure, determination, rule, notice, or guideline established or issued  by the Franchise Tax Board pursuant to this section.
(h) (i)  This section shall remain in effect only until December 1, 2027,  1 of the calendar year after the year of the cut-off date,  and as of that date  December 1  is repealed.

SEC. 3.

 Section 23623 of the Revenue and Taxation Code, as added by Section 8 of Chapter 10 of the 3rd Third Extraordinary Session of the Statutes of 2009, is repealed.

SEC. 4.

 Section 23623 of the Revenue and Taxation Code, as added by Section 8 of Chapter 17 of the 3rd Third Extraordinary Session of the Statutes of 2009, is amended to read:

23623.
 (a) For each taxable year beginning on or after January 1, 2009, there shall be allowed as a credit against the “tax,” as defined in Section 23036, three thousand dollars ($3,000) for each net increase in qualified full-time employees, as specified in subdivision (c), hired during the taxable year by a qualified employer.
(b) For purposes of this section:
(1) “Acquired” includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.
(2) “Qualified full-time employee” means:
(A) A qualified employee who was paid qualified wages during the taxable year by the qualified employer for services of not less than an average of 35 hours per week.
(B) A qualified employee who was a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified employer.
(3) A “qualified employee” shall not include any of the following:
(A) An employee certified as a qualified employee in an enterprise zone designated in accordance with Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1 of the Government Code.
(B) An employee certified as a qualified disadvantaged individual in a manufacturing enhancement area designated in accordance with Section 7073.8 of the Government Code.
(C) An employee certified as a qualified employee in a targeted tax area designated in accordance with Section 7097 of the Government Code.
(D) An employee certified as a qualified disadvantaged individual or a qualified displaced employee in a local agency military base recovery area (LAMBRA) designated in accordance with Chapter 12.97 (commencing with Section 7105) of Division 7 of Title 1 of the Government Code.
(E) An employee whose wages are included in calculating any other credit allowed under this part.
(4) (A) For taxable years beginning on or after January 1, 2009, and before January 1, 2011, “qualified employer” means a taxpayer that, as of the last day of the preceding taxable year, employed a total of 20 or fewer employees.
(B) For taxable years beginning on or after January 1, 2011, “qualified employer” means a taxpayer that, as of the last day of the preceding taxable year, employed a total of 50 or fewer employees.
(5) “Qualified wages” means wages subject to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(6) “Annual full-time equivalent” means either of the following:
(A) In the case of a full-time employee paid hourly qualified wages, “annual full-time equivalent” means the total number of hours worked for the taxpayer by the employee (not to exceed 2,000 hours per employee) divided by 2,000.
(B) In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the taxpayer by the employee divided by 52.
(c) The net increase in qualified full-time employees of a qualified employer shall be determined as provided by this subdivision:
(1) (A) The net increase in qualified full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B).
(B) The total number of qualified full-time employees employed in the preceding taxable year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year.
(C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year.
(2) For taxpayers that first commence doing business in this state during the taxable year, the number of full-time employees for the immediately preceding prior taxable year shall be zero.
(d) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding seven years if necessary, until the credit is exhausted.
(e) Any deduction otherwise allowed under this part for qualified wages shall not be reduced by the amount of the credit allowed under this section.
(f) For purposes of this section:
(1) All employees of the trades or businesses that are treated as related under either Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.
(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (g) of Section 24416.20, without application of paragraph (7) of that subdivision, shall apply.
(g) (1) (A) Credit under this section shall be allowed only for credits claimed on a timely filed original return received by the Franchise Tax Board on or before the cut-off date established by the Franchise Tax Board.
(B) For purposes of this paragraph, the cut-off date shall be the last day of the calendar quarter within which the Franchise Tax Board estimates it will have received timely filed original returns claiming credits under this section and Section 17053.80 that cumulatively total four hundred million dollars ($400,000,000) for all taxable years.
(2) The date a return is received shall be determined by the Franchise Tax Board.
(3) (A) The determinations of the Franchise Tax Board with respect to the cut-off date, the date a return is received, and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination under this subdivision, including the application of the limitation specified in subparagraph (B) of paragraph (1), shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from such disallowance may be assessed by the Franchise Tax Board in the same manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on its Internet Web site with respect to the amount of credit under this section and Section 17053.80 claimed on timely filed original returns received by the Franchise Tax Board.
(h) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the limitation on total credits allowable under this section and Section 17053.80 and guidelines necessary to avoid the application of paragraph (2) of subdivision (f) through split-ups, shell corporations, partnerships, tiered ownership structures, or otherwise.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.
(i) This section shall remain in effect only until December 1 of the calendar year after the year of the cut-off date, and as of that December 1 is repealed.
SEC. 5.
 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.