You may still be able to take advantage of California’s New Jobs Credit. This credit provides up to $3,000 for each net increase in qualified full-time employees hired during the taxable year. California funded $400 millions for the New Jobs Credit in 2009 and the credit is available until the fund runs out. To date, there is still over $260 million in unclaimed credits.
To qualify for the credit an employer must meet the following:
- Each qualified full-time hourly employee is paid wages for not less than an average of 35 hours per week.
- Each qualified full-time employee that is a salaried employee was paid compensation during the year for full-time employment.
- On the last day for the preceding taxable year, you employed a total of 20 or fewer employees.
- There is a net increase in qualified full-time employees compared to the number of full-time employees employed in the preceding taxable year.
- Employer may not claim the credit for those employees whose wages are included in calculating any other credits including the following:
- Enterprise zone or targeted tax area
- Disadvantaged individual or qualified displaced employee in a local agency military base recovery area
If you qualify, you can claim this credit by asking your accountant to complete Form FTB 3527, New Jobs Credit and file with your California tax return. You may also claim it for prior years where it was missed by amending prior years’ returns.
This credit is well worth the few minutes of your time to fill out the questionnaire and see if you meet the requirements above. As one of our clients discovered last year, they received nearly a $10,000 tax credit on their California taxes. Since there are limited funds available for this program, please do not delay in considering this credit.
If you’d like more information, please call our office and ask for Bassim Michael at 1-877-71-TAXES. You can also email Bassim at bmichael@bmichaelcpa.com.