As a small business owner you could use all the tax
breaks you can get. California has one that is temporarily been put on the
books that offers an incentive for hiring new full time employees.
In January 2009 the CA Revenue and Tax Code that allowed
some small business owners business to be eligible for a special tax credit. AB 697 aka New Jobs Credit has *$400,000,000
allocated to it. As of today *$180,426,821,
has been disbursed. This leaves room for companies to still utilize the credit.
The California Franchise Tax Board updates it’s site
monthly to notify the public how much of the funds are still available. Once
all the money is exhausted, the tax incentive will expire.
HOW
TO QUALIFY?
·
Hire a new employee within your tax reported
year that works at least 35 hours per week.
·
Each qualified full-time employee that is a
salaried employee was paid compensation during the year for full-time
employment within the meaning of Section 515 of the Labor Code.
·
Have 20 or fewer employees on the last day of
the preceding taxable year.
·
There is an increase in full time employees,
compared to the previous taxable year. For new California business this number
would be zero.
HOW
TO CLAIM THE CREDIT?
Claiming the credit is simple, when filing your personal
return or business entity return, use CA FTB form 3527. If you have any further
questions contact the CA Franchise Tax Board at 1-800-852-5711.
WHAT
ARE THE RESTRICTIONS?
Companies whom employees fall into these categories do
not qualify.
·
Certified as a qualified
employee in an enterprise zone or targeted tax area.
·
Certified as a qualified
disadvantaged individual in a manufacturing enhancement area.
·
Certified as a qualified
disadvantaged individual or qualified displaced employee in a local agency
military base recovery area.
·
An employee whose wages
are included in calculating any other credit allowed.
*Source CA Franchise Tax Board
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