Home | Newsroom | About Us | Upcoming Events | FAQ | Contact | Blog | RSS RSS

The New Rules Under AB93

Under A.B. 93, the California EZ program will be replaced with a hiring credit with significant limitations, and will impose stricter qualification requirements, such as:

  • Demonstration of a net increase in new full time employees;
  • Wages must be between 150-350% of California’s minimum wage; and
  • The employee must qualify under one of four criteria:
    • Unemployed/displaced worker;
    • A U.S. military veteran:
    • An ex-offender; or
    • Recipient of the Earned Income Credit.

The new hiring credit may only be claimed on a timely-filed, original return, and is subject to a competition process, based on the limited availability of funds within a respective fiscal year set by the newly-created California Competes Tax Credit Committee, which will be responsible for establishing limits on the aggregate amount of credits available to taxpayers. Businesses seeking to claim these credits must request a tentative credit reservation with the Franchise Tax Board within 30 days of the employee’s date of hire, and must submit an annual certification of employment for each full-time employee to remain eligible for the credit during the 60-month credit period.  The credit may be recaptured if the employer terminates the employment relationship within three years of hire, absent a statutorily enumerated exception.

Qualified employees hired before December 31, 2013, may be vouchered and will continue to generate credits for the five year period.  The carry forward has been limited to 10 years.  There is much clean up work going on which is slated for late summer.

Leave a Reply

Home | Newsroom | About Us | Upcoming Events | FAQ | Contact | Blog | RSS RSS
5670 Wilshire Blvd, Suite 1530, Los Angeles, CA 90036, Ph: 310-402-2780, Fax: 866-381-3118
© 2010 C&I Tax Consultants. All rights reserved.