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SB-1484 Income taxes: credits: qualified first-year wages: foster or former foster youth.(2021-2022)

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Date Published: 06/13/2022 09:00 PM
SB1484:v97#DOCUMENT

Amended  IN  Assembly  June 13, 2022
Amended  IN  Senate  May 09, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 1484

Introduced by Senator Grove

February 18, 2022

An act to add and repeal Sections 17053.77 and 23677 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1484, as amended, Grove. Income taxes: credits: qualified first-year wages: foster or former foster youth.
The Personal Income Tax Law and Corporation Tax Law allow various credits against the taxes imposed by that law, including a credit for hiring qualified full-time employees within a designated census tract or economic development area, as provided.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2023, and before January 1, 2028, in an amount that is equal to either 40% or 25% of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified first-year wages of qualified employees, depending on the amount of hours worked by the qualified employee during the first year of employment. The bill would provide that the credit amount is not to exceed $2,400 per qualified employee. The bill would define “qualified employee” to mean an employee who is hired on or after January 1, 2023, and who is a foster youth or former foster youth, as those terms are defined.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
The bill would also include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17053.77 is added to the Revenue and Taxation Code, to read:

17053.77.
 (a) (1) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to the amount specified in this subdivision for qualified first-year wages paid or incurred by the qualified taxpayer during the taxable year to a qualified employee.
(2) (A) Subject to paragraph (3), if the qualified employee worked 400 hours or more during the first year of employment, the amount of the credit allowed pursuant to this section for the taxable year shall be equal to 40 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified first-year wages of qualified employees.
(B) Subject to paragraph (3), if the qualified employee worked less than 400 hours during the first year of employment, the amount of the credit allowed pursuant to this section for the taxable year shall be equal to 25 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified wages of qualified employees.
(3) Notwithstanding paragraph (2), the credit allowed pursuant to this section shall not exceed two thousand four hundred dollars ($2,400). ($2,400) per qualified employee.
(b) For purposes of this section:
(1) “First year of employment” means the first year the qualified employee renders services for the qualified taxpayer and is paid qualified first-year wages by the qualified taxpayer for those services.
(2) “Foster youth or former foster youth” means an individual who is no older than 26 years of age as of the last day of the taxable year and who meets, or has ever met, either of the following criteria:
(A) A child who was the subject of a petition filed pursuant to Section 300 of the Welfare and Institutions Code and was removed from the child’s home by the juvenile court pursuant to Section 319 or 361 of the Welfare and Institutions Code.
(B) A child who was the subject of a petition filed pursuant to Section 602 of the Welfare and Institutions Code and was removed from the child’s home by the juvenile court pursuant to Section 727 of the Welfare and Institutions Code.
(3) “Qualified employee” means an employee that meets both of the following criteria:
(A) Was hired on or after January 1, 2023.
(B) Is a foster youth or former foster youth.
(4) “Qualified first-year wages” means, with respect to any qualified employee, qualified wages attributable to service rendered during the one-year period commencing with the date the qualified employee begins work for the qualified taxpayer.
(5) “Qualified taxpayer” means a taxpayer who pays or incurs qualified first-year wages.
(6) “Qualified wages” means wages paid or incurred by the qualified taxpayer during the taxable year to qualified employees.
(7) “Wages” means wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(c) 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 five years if necessary, until the credit is exhausted.
(d) This credit shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed pursuant to this part with respect to amounts taken into account under this section in calculating the credit allowed by this section.
(e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.

SEC. 2.

 Section 23677 is added to the Revenue and Taxation Code, to read:

23677.
 (a) (1) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to the amount specified in this subdivision for qualified first-year wages paid or incurred by the qualified taxpayer during the taxable year to a qualified employee.
(2) (A) Subject to paragraph (3), if the qualified employee worked 400 hours or more during the first year of employment, the amount of the credit allowed pursuant to this section for the taxable year shall be equal to 40 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified first-year wages of qualified employees.
(B) Subject to paragraph (3), if the qualified employee worked less than 400 hours during the first year of employment, the amount of the credit allowed pursuant to this section for the taxable year shall be equal to 25 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified wages of qualified employees.
(3) Notwithstanding paragraph (2), the credit allowed pursuant to this section shall not exceed two thousand four hundred dollars ($2,400). ($2,400) per qualified employee.
(b) For purposes of this section:
(1) “First year of employment” means the first year the qualified employee renders services for the qualified taxpayer and is paid qualified first-year wages by the qualified taxpayer for those services.
(2) “Foster youth or former foster youth” means an individual who is no older than 26 years of age as of the last day of the taxable year and who meets, or has ever met, either of the following criteria:
(A) A child who was the subject of a petition filed pursuant to Section 300 of the Welfare and Institutions Code and was removed from the child’s home by the juvenile court pursuant to Section 319 or 361 of the Welfare and Institutions Code.
(B) A child who was the subject of a petition filed pursuant to Section 602 of the Welfare and Institutions Code and was removed from the child’s home by the juvenile court pursuant to Section 727 of the Welfare and Institutions Code.
(3) “Qualified employee” means an employee that meets both of the following criteria:
(A) Was hired on or after January 1, 2023.
(B) Is a foster youth or former foster youth.
(4) “Qualified first-year wages” means, with respect to any qualified employee, qualified wages attributable to service rendered during the one-year period commencing with the date the qualified employee begins work for the qualified taxpayer.
(5) “Qualified taxpayer” means a taxpayer who pays or incurs qualified first-year wages.
(6) “Qualified wages” means wages paid or incurred by the qualified taxpayer during the taxable year to qualified employees.
(7) “Wages” means wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(c) 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 taxable year, and succeeding five years if necessary, until the credit is exhausted.
(d) This credit shall be in lieu of any other credit or deduction that the qualified taxpayer may otherwise be allowed pursuant to this part with respect to amounts taken into account under this section in calculating the credit allowed by this section.
(e) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.

SEC. 3.

 (a) For the purposes of complying with Section 41, the Legislature finds and declares the following:
(1) The goal, purpose, or objective of Sections 17053.77 and 23677 of the Revenue and Taxation Code, as added by this act, hereafter “credits,” is to expand employment opportunities for homeless, foster, foster or former foster youth by creating hiring incentives that recognize these youth often lack the privilege of a stable upbringing and may need additional assistance in the workplace.
(2) The performance indicator for the Legislature to use when measuring whether the credits meet the goal, purpose, or objective specified in paragraph (1) is how many taxpayers are allowed the credits.
(b) (1) For each calendar year from 2024 to 2029, 2025 to 2030, inclusive, the Franchise Tax Board shall annually publish the information specified in paragraph (2) of subdivision (a), both for the previous taxable year and cumulatively, on its internet website.
(2) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2.

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.