Bill Text: NJ A3462 | 2024-2025 | Regular Session | Introduced
Bill Title: Allows corporation business tax and gross income tax credits to businesses employing certain persons with developmental disabilities.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-05 - Introduced, Referred to Assembly Aging and Human Services Committee [A3462 Detail]
Download: New_Jersey-2024-A3462-Introduced.html
Sponsored by:
Assemblywoman CAROL A. MURPHY
District 7 (Burlington)
SYNOPSIS
Allows corporation business tax and gross income tax credits to businesses employing certain persons with developmental disabilities.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing credits against the corporation business tax and the gross income tax to businesses employing certain persons with developmental disabilities, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section:
"Qualified person with a developmental disability" means an individual who:
(1) has a severe, chronic disability, which: (a) is attributable to a mental or physical impairment or combination of mental or physical impairments; (b) is manifest before age 22; (c) is likely to continue indefinitely; (d) results in substantial functional limitations in an area of major life activity; and (e) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment, or other services which are of lifelong or extended duration and are individually planned and coordinated; or
(2) has severe disabilities attributable to an intellectual disability, autism, cerebral palsy, epilepsy, spina bifida, or other neurological impairments.
b. The director shall allow a taxpayer 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 40 percent of the first $6,000 of wages paid by the taxpayer during the privilege period for the employment of a qualified person with a developmental disability, not to exceed $2,400 for each qualified person with a developmental disability for the privilege period.
c. A taxpayer shall apply the credit awarded against the taxpayer's liability under section 5 of P.L.1945, c.162 (C.54:10A-5) for the current privilege period as of the date of the credit's approval.
d. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability 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).
e. (1) A taxpayer shall not be granted a credit pursuant to this section for the qualified wages paid to a qualified person with a developmental disability in a privilege period if the qualified wages of the qualified person with a developmental disability or the job providing qualified wages to the qualified person with a developmental disability is included in the calculation of another credit against any State tax or grant for a period of time that coincides with the applicable privilege period.
(2) If the director determines that a taxpayer is displacing employees and replacing the employees with a qualified person with a developmental disability for the primary purposes of obtaining the credit allowed pursuant to this section, the director shall deny the taxpayer the credit allowed under this section and shall issue a tax assessment for the recapture of credit previously allowed to the taxpayer under this section plus an assessment of 50 percent of any credit subject to recapture as penalty.
2. a. As used in this section:
"Qualified person with a developmental disability" means an individual who:
(1) has a severe, chronic disability, which: (a) is attributable to a mental or physical impairment or combination of mental or physical impairments; (b) is manifest before age 22; (c) is likely to continue indefinitely; (d) results in substantial functional limitations in an area of major life activity; and (e) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment, or other services which are of lifelong or extended duration and are individually planned and coordinated; or
(2) has severe disabilities attributable to an intellectual disability, autism, cerebral palsy, epilepsy, spina bifida, or other neurological impairments.
b. The director shall allow a taxpayer a credit against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 40 percent of first $6,000 of the wages paid by the taxpayer during the taxable year for the employment of a qualified person with a developmental disability during the taxable year, not to exceed $2,400 for each qualified person with a developmental disability for the taxable year.
c. A taxpayer shall apply the credit awarded against the taxpayer's liability under N.J.S.54A:1-1 et seq. for the current taxable year as of the date of the credit's approval.
d. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under N.J.S.54A:1-1 et seq. The amount of the credit applied under this section against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability to an amount less than zero.
e. (1) A taxpayer shall not be granted a credit pursuant to this section for the qualified wages paid to a qualified person with a developmental disability in a taxable year if the qualified wages of the qualified person with a developmental disability or the job providing qualified wages to the qualified person with a developmental disability is included in the calculation of another credit against any State tax or grant for a period of time that coincides with the applicable taxable year.
(2) If the director determines that a taxpayer is displacing employees and replacing the employees with a qualified person with a developmental disability for the primary purposes of obtaining the credit allowed pursuant to this section, the director shall deny the taxpayer the credit allowed under this section and shall issue a tax assessment for the recapture of credit previously allowed to the taxpayer under this section plus an assessment of 50 percent of any credit subject to recapture as penalty.
f. A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
3. This act shall take effect immediately and shall apply to wages paid in privilege periods and taxable years beginning after enactment.
STATEMENT
This bill allows corporation business tax and gross income tax credits to businesses that employ qualified persons with developmental disabilities. The amount of each credit would be equal to 40 percent of the first $6,000 of wages paid to the qualified person with a developmental disability, a maximum of $2,400 per qualified person with a developmental disability.
A qualified person with a developmental disability is defined in the bill as a person who: (1) has a severe, chronic disability, which: (a) is attributable to a mental or physical impairment or combination of mental or physical impairments; (b) is manifest before age 22; (c) is likely to continue indefinitely; (d) results in substantial functional limitations in an area of major life activity; and (e) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment, or other services which are of lifelong or extended duration and are individually planned and coordinated; or (2) has severe disabilities attributable to an intellectual disability, autism, cerebral palsy, epilepsy, spina bifida, or other neurological impairments.
These State tax credits are modeled on the federal Work Opportunity Tax Credit (WOTC), which encourages employers to hire targeted groups of employees, including certain persons with developmental disabilities. Under the federal WOTC, employers may claim a federal tax credit of up to 40 percent of the first $6,000 earned by the employee, or $2,400.
According to the sponsor, the tax credits allowed under this bill would encourage businesses to employ qualified persons with developmental disabilities, who often face barriers to employment.
