Bill Text: CA AB1861 | 2021-2022 | Regular Session | Amended
Bill Title: Tax credit: hiring: foster care.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2022-05-19 - In committee: Held under submission. [AB1861 Detail]
Download: California-2021-AB1861-Amended.html
|
Amended
IN
Assembly
April 07, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 1861
| Introduced by Assembly Member Bryan |
February 08, 2022 |
An act to add and repeal Sections 17053.81 and 23633 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1861, as amended, Bryan.
Tax credit: hiring: foster care.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, for each taxable year beginning on or after January 1, 2023, and before January 1, 2028, would allow a credit against the taxes imposed under both laws to a qualified taxpayer, as defined, that employs an eligible individual in a prescribed amount, not exceeding $10,000, $30,000, based on the number of hours an eligible individual worked for the eligible employer during the taxable year in which the credit is claimed.
year. The bill would define the term “eligible individual” to mean a person who is at least 16 years of age and but not older than 26 years of age age, who spent time in foster care on or after becoming 13 years of age who has a certification issued pursuant to the provision described below. The bill would require age, and who is verified by a county child welfare agency or the State Department of Social Services to issue certifications for eligible individuals.
Services, as provided. By expanding the duties of a county child welfare agency, this bill would impose a state-mandated local program.
Existing law requires a bill that would authorize a new tax expenditure under the Personal Income Tax Law or the Corporation Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.
This bill would include additional information required for a bill authorizing a new tax expenditure.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
This bill would take effect immediately as a tax levy.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17053.81 is added to the Revenue and Taxation Code, to read:17053.81.
(a) (1) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed to a qualified taxpayer that employs an eligible individual a credit against the “net tax,” as defined in Section 17039, in an amount as determined pursuant to paragraph (2), not to exceed(2) A qualified taxpayer shall be allowed the credit pursuant to this section in the following amounts per taxable year:
(A) Two thousand five hundred dollars ($2,500) for each eligible individual that works at least 500 hours, but fewer than 1,000 hours, for the eligible employer during the taxable year in which the credit
is claimed. year.
(B) Five thousand dollars ($5,000) for each eligible individual that works at least 1,000 hours, but fewer than 1,500 hours, for the eligible employer during the taxable year in which the credit is claimed. year.
(C) Seven thousand five hundred dollars ($7,500) for each eligible individual that works at least 1,500 hours, but fewer than 2,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
year.
(D) Ten thousand dollars ($10,000) for each eligible individual that works at least 2,000 hours for the eligible employer during the taxable year in which the credit is claimed. year.
(b) For purposes of this section:
(1) “Eligible employer” means a taxpayer that meets all of the following requirements:
(A) Pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(B) Pays at least 120 percent of minimum wage.
(C) Provides to the Franchise Tax Board, upon request, a copy of the certification verification received for each eligible individual for each tax taxable year that the credit is claimed for that eligible individual by that eligible employer.
(2) “Eligible individual” means a person who meets all of the following criteria:
(A) The person is at least 16 years of age and not older than 26 years of age. age on the last day of the taxable year.
(B) The person spent time in foster care on or after becoming 13 years of age.
(C) The person has a certification issued person’s eligibility has been verified pursuant to paragraph (2) of
subdivision (c).
(3) “Minimum wage” means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(4) “Qualified taxpayer” means an eligible employer that pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code to an eligible individual.
(c)(1)A credit shall not be allowed under this section unless the eligible employer submits to the Franchise Tax Board, upon request, a certification issued by a county child welfare agency or a state foster care ombudsman’s office.
(2)(A)
(c) (1) A county child welfare agency or the State Department of Social Services shall issue certifications for eligible individuals. provide verification of an individual’s eligibility for the purposes of this section.
(B) A certification issued
(2) The verification required pursuant to this paragraph shall be issued provided in a form and manner prescribed by the Franchise Tax Board.
(d) (1) The total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers pursuant to this section and Section 23633 shall not exceed thirty million dollars ($30,000,000), plus the unallocated credit amount, if any, from the preceding calendar year.
(2)A qualified taxpayer shall claim the credit on a timely filed original return of the qualified taxpayer and only with respect to an
eligible individual for whom the qualified taxpayer has received a credit reservation.
(3)
(2) (A) To be eligible for the credit allowed by this section with respect to an eligible individual, a qualified taxpayer shall, upon hiring an eligible individual, shall request a credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Department’s new hire reporting requirements, pursuant to Section 1088.5 of the Unemployment Insurance Code,
Board, in the form and manner prescribed by the Franchise Tax Board. Board, pursuant to either of the following:
(i) Upon hiring an eligible individual, within 30 days from the date the employee first performs services for the qualified taxpayer for wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(ii) With respect to each eligible individual hired in a previous taxable year, no later than
one year and 30 days from the date of the receipt of the immediate prior reservation.
(B) To obtain a credit reservation with respect to an eligible individual, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the number of hours the eligible individual is expected to work for the next 12 months, and the start date of employment.
(e) The Franchise Tax Board shall do both of the following:
(1) Approve a tentative credit reservation with respect to an eligible individual hired during a taxable year.
(2) Allocate credits pursuant to this section and Section
23633 and allocate any carryover of unallocated credits from prior years.
(f) If the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding two years if necessary, until the credit is exhausted.
(g) If the credit allowed by this section is claimed by the qualified taxpayer, a deduction otherwise allowed under this part for any amount of wages paid or incurred by the qualified taxpayer as a trade or business expense to an eligible individual shall be reduced by the amount of the credit allowed by this section.
(h) If the credit allowed by this section is claimed by the qualified taxpayer, a credit allowed under Section
17053.80 or 23629 shall be reduced by the amount of credit allowed by this section.
(i) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(j) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.
SEC. 2.
Section 23633 is added to the Revenue and Taxation Code, to read:23633.
(a) (1) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed to a qualified taxpayer that employs an eligible individual a credit against the “tax,” as defined in Section 23036, in an amount as determined pursuant to paragraph (2), not to exceed(2) A qualified taxpayer shall be allowed the credit pursuant to this section in the following amounts per taxable year:
(A) Two thousand five hundred dollars ($2,500) for each eligible individual that works at least 500 hours, but fewer than 1,000 hours, for the eligible employer during the taxable year in which the credit is
claimed. year.
(B) Five thousand dollars ($5,000) for each eligible individual that works at least 1,000 hours, but fewer than 1,500 hours, for the eligible employer during the taxable year in which the credit is claimed. year.
(C) Seven thousand five hundred dollars ($7,500) for each eligible individual that works at least 1,500 hours, but fewer than 2,000 hours, for the eligible employer during the taxable year in which the credit is claimed.
year.
(D) Ten thousand dollars ($10,000) for each eligible individual that works at least 2,000 hours for the eligible employer during the taxable year in which the credit is claimed. year.
(b) For purposes of this section:
(1) “Eligible employer” means a taxpayer that meets all of the following requirements:
(A) Pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(B) Pays at least 120 percent of minimum wage.
(C) Provides to the Franchise Tax Board, upon request, a copy of the certification verification received for each eligible individual for each tax taxable year that the credit is claimed for that eligible individual by that eligible employer.
(2) “Eligible individual” means a person who meets all of the following criteria:
(A) The person is at least 16 years of age and not older than 26 years of age. age on the last day of the taxable year.
(B) The person spent time in foster care on or after becoming 13 years of age.
(C) The person has a certification issued person’s eligibility has been verified pursuant to paragraph (2) of
subdivision (c).
(3) “Minimum wage” means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(4) “Qualified taxpayer” means an eligible employer that pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code to an eligible individual.
(c)(1)A credit shall not be allowed under this section unless the eligible employer submits to the Franchise Tax Board, upon request, a certification issued by a county child welfare agency or a state foster care ombudsman’s office.
(2)(A)
(c) (1) A county child welfare agency or the State Department of Social Services shall issue certifications for eligible individuals. provide verification of an individual’s eligibility for the purposes of this section.
(B)A certification issued
(2) The verification required pursuant to this paragraph shall be issued provided in a form and manner prescribed by the Franchise Tax Board.
(d) (1) The total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers pursuant to this section and Section 17053.81 shall not exceed thirty million dollars ($30,000,000), plus the unallocated credit amount, if any, from the preceding calendar year.
(2)A qualified taxpayer shall claim the credit on a timely filed original return of the qualified taxpayer and only with respect to an
eligible individual for whom the qualified taxpayer has received a credit reservation.
(3)
(2) (A) To be eligible for the credit allowed by this section with respect to an eligible individual, a qualified taxpayer shall, upon hiring an eligible individual, shall request a credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Department’s new hire reporting requirements, pursuant to Section 1088.5 of the Unemployment Insurance Code,
Board, in the form and manner prescribed by the Franchise Tax Board. Board, pursuant to either of the following:
(i) Upon hiring an eligible individual, within 30 days from the date the employee first performs services for the qualified taxpayer for wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.
(ii) With respect to each eligible individual hired in a previous taxable year, no later than one year and 30 days from the date of the receipt of the immediate prior reservation.
(B) To obtain a credit reservation with respect to an eligible individual, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the number of hours the eligible individual is expected to work for the next 12 months, and the start date of employment.
(e) The Franchise Tax Board shall do both of the following:
(1) Approve a tentative credit reservation with respect to an eligible individual hired during a taxable year.
(2) Allocate credits pursuant to this section and Section 17053.81 and allocate any carryover of unallocated credits from prior years.
(f) If the credit allowed by this section exceeds the “net tax,” “tax,” the excess may be carried over to reduce the “net tax” “tax” in the following taxable year, and succeeding two years if necessary, until the credit is exhausted.
(g) If the credit allowed by this section is claimed by the qualified taxpayer, a deduction otherwise allowed under this part for any amount of wages paid or incurred by the qualified taxpayer as a trade or
business expense to an eligible individual shall be reduced by the amount of the credit allowed by this section.
(h) If the credit allowed by this section is claimed by the qualified taxpayer, a credit allowed under Section 17053.80 or 23629 shall be reduced by the amount of credit allowed by this section.
(i) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(j) This section shall remain in effect only until December 1, 2028, and as of that date is repealed.
SEC. 3.
For the purpose of complying with Section 41 of the Revenue and Taxation Code, relating to Sections 17053.81 and 23633 of the Revenue and Taxation Code as added by this act, the Legislature finds and declares the following:(a) The specific objective of the tax credits allowed by Sections 17053.80 17053.81 and 23633 of the Revenue and Taxation Code is to remove barriers to workforce participation and create employment opportunities for youth and young adults transitioning out of the foster
care system to support their ability to achieve self-sufficiency in adulthood.
(b) (1) The By June 1, 2025, and annually thereafter, the Franchise Tax Board shall annually report to the Legislature the total dollar amount of the credits allowed under Sections 17053.80 17053.81 and 23633 of the Revenue and Taxation Code with respect to the relevant fiscal year.
(2) The
report required by this subdivision shall be submitted pursuant to Section 9795 of the Government Code.
(3) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2.
