Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Allows temporary corporation business tax and gross income tax credits for businesses that provide hiring bonuses to targeted employees.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing temporary credits against corporation business tax and gross income tax for businesses that provide hiring bonuses to targeted employees.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to the total hiring bonuses, not to exceed $1,000, paid by the taxpayer during the twelve-month period following the effective date of P.L. , c. (pending before the Legislature as this bill) for the employment of members of targeted groups, except that the credit shall not be claimed until the taxpayer has satisfied the conditions set forth in subsection b. of this section.
b. The tax credit shall not be allowed for any hiring bonus that is paid to a member of a targeted group whose employment was terminated by the taxpayer within twelve months of the date of hire. The taxpayer shall be allowed to claim the credit only after this 12 month period has concluded.
c. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall be as prescribed by the Director of the Division of Taxation in the Department of the Treasury. The amount of the credit, together with any other credits allowed by law, shall not reduce the taxpayer’s liability otherwise due for the privilege period under section 5 of P.L.1945, c.162 (C.54:10A-5) to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the credit otherwise allowable under this section that cannot be applied for the privilege period due to the limitations of this subsection, or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.), may be carried over, if necessary, to the seven privilege periods next following the privilege period for which the credit was allowed.
d. As used in this section:
“Hiring bonus” means a sum of monies, not including salary and wages, paid by the employer to a member of a targeted group, within one month of the date of hire, as an inducement for the acceptance of a position of employment.
“Members of targeted groups” means the same as that term is defined in subsection (d) of section 51 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.51.
2. a. A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to the total hiring bonuses, not to exceed $1,000, paid by the taxpayer during the twelve-month period following the effective date of P.L. , c. (pending before the Legislature as this bill) for the employment of members of targeted groups, except that the credit shall not be claimed until the taxpayer has satisfied the conditions set forth in subsection b. of this section.
b. The tax credit shall not be allowed for any hiring bonus that is paid to a member of a targeted group whose employment was terminated by the taxpayer within twelve months of the date of hire. The taxpayer shall be allowed to claim the credit only after this 12 month period has concluded.
c. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall be as prescribed by the Director of the Division of Taxation in the Department of the Treasury. The amount of the credit, together with any other credits allowed by law, shall not reduce the taxpayer’s liability otherwise due for the taxable year under N.J.S.54A:1-1 et seq. to an amount less than zero. The amount of the tax credit otherwise allowable under this section that cannot be applied for the taxable year due to the limitations of this subsection, or under other provisions of N.J.S.54A:1-1 et seq., may be carried forward, if necessary, to the seven taxable years next following the taxable year for which the tax credit was allowed.
d. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer with respect to the distributive share of entity income shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer’s share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer’s taxable year.
(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer with respect to a pro-rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer’s share, whether or not distributed, of the total pro-rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer’s taxable year.
e. As used in this section:
“Hiring bonus” means a sum of monies, not including salary and wages, paid by the employer to a member of a targeted group, within one month of the date of hire, as an inducement for the acceptance of a position of employment.
“Members of targeted groups” means the same as that term is defined in subsection (d) of section 51 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.51.
3. Notwithstanding any provision of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt, immediately upon filing with the Office of Administrative Law and no later than the 90th day after the effective date of this act, such rules and regulations as the director deems necessary to implement the provisions of P.L. , c. (pending before the Legislature as this bill), which regulations shall be effective for a period not to exceed 18 months. The regulations shall thereafter be amended, adopted, or readopted by the director in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).
4. This act shall take effect immediately.
STATEMENT
This bill provides corporation business tax and gross income tax credits to businesses that provide hiring bonuses to certain targeted employees. The tax credits would be temporary and apply only to hiring bonuses paid within one year of the enactment of the bill.
Under the bill, the credit would equal the amount of total hiring bonuses, not to exceed $1,000, paid during the twelve-month period following the enactment of the bill for the employment of certain targeted employees. However, the taxpayer would not be allowed to claim the credit for any hiring bonus that is paid to a person whose employment was terminated by the taxpayer within twelve months of the date of hire.
Specifically, the bill requires the hiring bonus to be paid to “members of targeted groups, as that term is defined under the federal Work Opportunity Tax Credit program, in order to qualify for the tax credit. These targeted employees would include recipients of Temporary Assistance to Needy Families benefits, qualified veterans, qualified ex-felons, designated community residents, qualified recipients of the Supplemental Nutrition Assistance Program, qualified recipients of Supplemental Security Income, qualified recipients of long-term unemployment, and certain other persons.