|
A business located in the Yuba-Sutter Enterprise Zone may reduce its
state income tax by the amount of wages paid to one or more
qualified employees. The business has the potential to earn
$31,605 or more in tax credits per qualifying employee
over a five-year period. There is no residency requirement; however, at least 50
percent of the employee's work must be performed inside the enterprise zone boundaries.
Generally, qualifying employees include those who meet one of the following eligibility
criteria relating to the job candidate's employment/wage earning status for a defined
period prior to the date of hire:
- Enrolled or eligible for the Job Partnership Training Act
(JTPA) or its successor, the Workforce Investment Act (WIA), or who are
participating in Welfare-to-Work activities under CalWORKs; members of a
targeted group under TJTC or its successor, Work Opportunity Tax Credit
(WOTC);
- Displaced Worker
- Disadvantage youth 14 years of age
or older
- Member of a federally-recognized Indian tribe or Native American
- Veteran
- Ex-offender
- Long-term unemployed
- Victim of a massive layoff or plant closure
- Unemployed due to a military base closure
- Previously self-employed
- Seasonal or migrant worker
- Individuals with physical or metal disability which limits ability to
work
- Low wage earners (based on state poverty guidelines)
- Resident of a designated Targeted
Employment Area (TEA)
- Receiving some form of monetary public assistance:
Food stamps
General Assistance Recipient
Refugee Cash Assistance (RCA)
Vocational Rehabilitation Referral
SSI/SSP (Social Security benefits)
State disability insurance benefits
Example:
On January 1, 2002, you hire an employee who is eligible or
enrolled in a job training program or residing in a Targeted
Employment Area (TEA). The employee works the entire
year at your enterprise zone business as a full-time employee
(2,080 hours) being paid at least $10.13 per hour. Your hiring credit would be calculated as
follows:
|
|
|
Year
One
$10.13 per hour x 2,080 hours = $21,070 x 50%
Year Two
$10.13 per hour x 2,080 hours = $21,070 x 40%
Year Three
$10.13 per hour x 2,080 hours = $21,070 x 30%
Year Four
$10.13 per hour x 2,080 hours = $21,070 x 20%
Year Five
$10.13 per hour x 2,080 hours = $21,070 x 10%
TOTAL VALUE OF HIRING CREDIT
$10.13 is the credit cap
value (1.5 min. wage). A business can pay more or less than the
cap, but only receive the credit for the actual wages paid to a
maximum of $10.13 per hour. |
$10,535
$8,428
$6,321
$4,214
$2,107
$31,605
|
|
