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AB-709 Personal Income Tax Law: Corporation Tax Law: tax credits: foster youth.(2021-2022)

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Date Published: 03/26/2021 04:00 AM
AB709:v98#DOCUMENT

Amended  IN  Assembly  March 25, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 709


Introduced by Assembly Member Nguyen

February 16, 2021


An act relating to business. An act to add Sections 17053.8 and 23622 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 709, as amended, Nguyen. Business. Personal Income Tax Law: Corporation Tax Law: tax credits: foster youth.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, for each taxable year beginning on or after January 1, 2021, and before January 1, 2028, would allow a credit against the taxes imposed by those laws to an employer for an amount equal to 40% of the qualified wages paid to a qualified employee, subject to a specified limitation. The bill would define “qualified wages” to mean wages paid for work completed as part of a Work Experience Education Program or a registered apprenticeship or preapprenticeship program. The bill would define “qualified employee” to mean a current or former foster youth that has not yet attained the age of 25 at the end of the taxable year. The bill would allow this credit for the first 12 months’ worth of qualified wages in the case of a qualified employee hired on or after January 1, 2021, and for wages paid during the 2021 calendar year for a qualified employee hired before January 1, 2021.
Existing law requires a bill that would authorize a new tax expenditure under the Personal Income Tax Law or the Corporation Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.
This bill would provide findings and declarations relating to the goals, purposes, and objectives of, and the performance indicator for, the credit created by the bill.
This bill would take effect immediately as a tax levy.

Existing law, the General Corporation Law, authorizes one or more natural persons, partnerships, associations, or corporations, domestic or foreign, to form a corporation under that law by executing and filing articles of incorporation, as provided.

This bill would state the intent of the Legislature to enact legislation that would address businesses.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17053.8 is added to the Revenue and Taxation Code, to read:

17053.8.
 (a) (1) For each taxable year beginning on or after January 1, 2021, and before January 1, 2028, there shall be allowed as a credit against the “net tax,” as defined by Section 17039, an amount equal to 40 percent of the qualified wages paid to a qualified employee, subject to paragraph (2).
(2) The credit allowed pursuant to this section shall not exceed two thousand four hundred dollars ($2,400) cumulatively for each qualified employee, regardless of taxable year.
(b) For purposes of this section:
(1) “Foster youth” shall mean any of the following:
(A) A child who is the subject of a petition filed pursuant to Section 300 of the Welfare and Institutions Code, whether or not the child has been removed from their home by the juvenile court pursuant to Section 319 or 361 of the Welfare and Institutions Code.
(B) A child who is the subject of a petition filed pursuant to Section 602 of the Welfare and Institutions Code, has been removed from their home by the juvenile court pursuant to Section 727 of the Welfare and Institutions Code, and is in foster care as defined by subdivision (d) of Section 727.4 of the Welfare and Institutions Code.
(C) A dependent child of the court of an Indian tribe, consortium of tribes, or tribal organization who is the subject of a petition filed in the tribal court pursuant to the tribal court’s jurisdiction in accordance with the tribe’s law, provided that the child would also meet one of the descriptions in Section 300 of the Welfare and Institutions Code describing when a child may be adjudged a dependent child of the juvenile court.
(2) “Qualified employee” shall mean an employee that satisfies both of the following:
(A) Has not attained the age of 25 as of the last day of the taxable year.
(B) Is currently, or was at one time, a foster youth.
(3) “Qualified wages” shall mean wages paid to a qualified employee for work completed as part of a Work Experience Education Program pursuant to Article 7 (commencing with Section 51760) of Chapter 5 of Part 28 of Division 4 of Title 2 of the Education Code or an apprenticeship or preapprenticeship program registered with the Division of Apprenticeship Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code.
(c) (1) In the case of an employee hired on or after January 1, 2021, the credit allowed by this section shall only be allowed for wages paid during the first 12 months of the employment of the qualified employee.
(2) In the case of an employee hired before January 1, 2021, the credit allowed by this section shall only be allowed for wages paid before January 1, 2022.
(d) Any deduction otherwise allowed under this part for qualified wages shall be reduced by the amount of the credit allowed under this section.

SEC. 2.

 Section 23622 is added to the Revenue and Taxation Code, to read:

23622.
 (a) (1) For each taxable year beginning on or after January 1, 2021, and before January 1, 2028, there shall be allowed as a credit against the “tax,” as defined by Section 23036, an amount equal to 40 percent of the qualified wages paid to a qualified employee, subject to paragraph (2).
(2) The credit allowed pursuant to this section shall not exceed two thousand four hundred dollars ($2,400) cumulatively for each qualified employee, regardless of taxable year.
(b) For purposes of this section:
(1) “Foster youth” shall mean any of the following:
(A) A child who is the subject of a petition filed pursuant to Section 300 of the Welfare and Institutions Code, whether or not the child has been removed from their home by the juvenile court pursuant to Section 319 or 361 of the Welfare and Institutions Code.
(B) A child who is the subject of a petition filed pursuant to Section 602 of the Welfare and Institutions Code, has been removed from their home by the juvenile court pursuant to Section 727 of the Welfare and Institutions Code, and is in foster care as defined by subdivision (d) of Section 727.4 of the Welfare and Institutions Code.
(C) A dependent child of the court of an Indian tribe, consortium of tribes, or tribal organization who is the subject of a petition filed in the tribal court pursuant to the tribal court’s jurisdiction in accordance with the tribe’s law, provided that the child would also meet one of the descriptions in Section 300 of the Welfare and Institutions Code describing when a child may be adjudged a dependent child of the juvenile court.
(2) “Qualified employee” shall mean an employee that satisfies both of the following:
(A) Has not attained the age of 25 as of the last day of the taxable year.
(B) Is currently, or was at one time, a foster youth.
(3) “Qualified wages” shall mean wages paid to a qualified employee for work completed as part of a Work Experience Education Program pursuant to Article 7 (commencing with Section 51760) of Chapter 5 of Part 28 of Division 4 of Title 2 of the Education Code or an apprenticeship or preapprenticeship program registered with the Division of Apprenticeship Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code.
(c) (1) In the case of an employee hired on or after January 1, 2021, the credit allowed by this section shall only be allowed for wages paid during the first 12 months of the employment of the qualified employee.
(2) In the case of an employee hired before January 1, 2021, the credit allowed by this section shall only be allowed for wages paid before January 1, 2022.
(d) Any deduction otherwise allowed under this part for qualified wages shall be reduced by the amount of the credit allowed under this section.

SEC. 3.

 In accordance with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares the following:
(a) The goal, purpose, or objective of the tax credits allowed by Sections 17053.8 and 23622 of the Revenue and Taxation Code, as added by this act, is to expand employment opportunities for current or former foster youth by creating hiring incentives.
(b) The performance indicator for the Legislature to use when measuring whether Sections 17053.8 and 23622 of the Revenue and Taxation Code, as added by this act, meet the goal, purpose, or objective specified above shall be the number of taxpayers who are allowed the credits.

SEC. 4.

  This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
SECTION 1.

It is the intent of the Legislature to enact legislation that would address businesses.