The “new” jobs tax credit in California isn’t exactly new – it was introduced in 2009 – but a great deal of it has gone unclaimed. With a reliable tax attorney in California, you and your small business may be able to save a nice chunk of change on your taxes and have more money to help your enterprise grow. This tax credit amounts to $3,000 for each new full-time employee that a small business (20 or fewer employees) hires. The credit is prorated going back to January 1, 2009 based on annual employment figures and is not subject to the 50% limitation for business credits, so it’s definitely worth the extra effort to take advantage of this opportunity. Small businesses can claim as much as $400 million for new employees hired since 2009. If you qualify, there’s no good reason not to take advantage of this credit now.
What You Need to Know Now
The Franchise Tax Board updated its information about the tax credit amounts in September of this year, and warned that the credit will need to be claimed before a cut-off date to be specified by the board, based on the $400,000,000 that the state has allocated. Businesses will have until the final day of the quarter within which the Franchise Tax Board expects to have received a total number of tax credit claims that reaches this allocated amount. It would be a good idea to contact a reliable tax attorney in California before applying, to avoid denial of the credit and further complications.
Do You Qualify?
Employers in California must fulfill the following requirements in order to claim this beneficial tax credit:
- The business must not have employed more than 20 people on the last day of the preceding tax year
- The business must employ more full-time employees in the qualifying year compared to the preceding tax year
- Newly hired employees must each work at least 35 hours a week to qualify
- Salaried employees must be paid for full-time employment according to the definitions put forth in Section 515 of the Labor Code in order to qualify
There are exceptions, as well, which may or may not apply to your small business. A qualified tax attorney can help weed through all the requirements and complete all the forms in a timely manner, so you can enjoy the benefits of this tax credit from the state of California.
Give our legal tax experts at Janathan L. Allen, APC at call at 866-631-3470. We’ll schedule a complimentary initial consultation for you to speak with one of our tax attorneys and help you with any questions you may have about the California New Jobs Tax Credit.
