Calculating
the Credit
The Hiring Tax Credit is based on the lesser of the
actual hourly wage paid or 150% of the minimum hourly wage
established by the Industrial Welfare Commission.
Currently, the minimum wage is $7.50. The hiring credit
ceiling is 150% of the minimum wage or $11.25 per hour. Effective
January 1, 2008, the minimum wage will increase to $8.00,
raising the hiring credit ceiling to $12.00 per hour.
In determining the allowed wages and the percentage breaks for a
part-time employee, use the full-time equivalent or 2,080 hours
per year. Wages that qualify for the hiring credit are
those wages paid to a qualified
employee for the consecutive 60-month period beginning on
the first date the employee commenced employment with the
employer. There is no time of employment requirement to
take advantage of this tax credit. Once employed, all
wages paid to a qualified employee are eligible.
Eligibility
Determination
Under the Enterprise Zone law, four groups of
individuals are eligible for a voucher (otherwise referred to as
EZ eligible:
- Those who are receiving
or are eligible to receive services under the Job Training
Partnership Act (JTPA) or its successor, the Workforce
Investment Act (WIA);
- Those who are a
participant in Welfare-to-Work activities under CalWORKs;
- Those who are members
of a targeted group under TJTC or its successor, the federal
Work Opportunity Tax Credit Program (WOTC); and
- Those employees
residing in a designated
Targeted
Employment Area (TEA).
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Voucher Application Fee
After November 1, 2004, all applications for enterprise zone
vouchering review, must include a $10 fee for each application
submitted. This fee is required by the state per SB 1097
signed into law on August 16, 2004. Applications received
without the fee included will be returned for resubmission.
There is no local fee. The submission form can be
downloaded -
pdf version or
word.
Qualified
Employees
Qualified 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
- Economically
disadvantaged individual 14 years of age or older
- Member of a
federally-recognized Indian tribe or Native American
- 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
- Involuntarily separated
active duty or National Guard as of 9/30/90
- Individuals with
physical or mental 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,
refugee cash assistance, vocational rehabilitation referral,
SSI/SSP (Social Security benefits), state disability
insurance benefits)
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Appropriate
Documentation
The
Hiring Credit Voucher Preapplication provides a
listing of acceptable documents for determining eligibility. A
file copy of any one document listed per criteria is acceptable
to the Department of Labor's standard of documentation. The
Department of Labor's standard will also apply to zone's
documentation of eligibility requirements. If
appropriate
documentation is not available, alternative methods of
documentation may exist such as verification by telephone or an
applicant's statement.
Work
Incentive Act (WIA)
A WIA or participant in Welfare-to-Work activities under
CalWORKs hired by a Yuba-Sutter Enterprise Zone business is
automatically eligible for the EZ Hiring Tax Credit
Program. The One
Stop Center can help you identify qualified individuals.
Work
Opportunity Tax Credit (WOTC)
The Ticket to Work and Work Incentives Improvement Act
of 1999 (Public Law 106-170) extends the
Work Opportunity Tax
Credit (WOTC) to December 31, 2007. The WOTC, which includes the
Welfare-to-Work Tax Credit, has two purposes: to promote
the hiring of individuals who qualify as a member of a targeted
group and to provide a federal tax credit to employers who hire
these individuals. Information on this tax credit program is
available from the One
Stop Centers or the WOTC Center at (916) 774-4374 or go to
the WOTC website on the Internet at www.edd.cahwnet.gov/wotcind.htm.
An individual eligible for the WOTC is also EZ eligible.
Targeted
Employment Area (TEA)
An individual residing in a designated
Targeted
Employment Area or TEA and hired by a Zone business is
automatically eligible for the EZ Hiring Credit program.
Verification of residency is all that is required. The
Yuba-Sutter Enterprise Zone includes two (2) TEAs, one
identified as Census Tract 502 in Yuba City and Census Tract 404
in Yuba County.
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Income
Eligibility
With the exception of residents of a Targeted Employment
Area, the family income of the employee must be verified as
being within the
eligibility
guidelines. Income eligibility
should be based on the 70 Percent Lower Living Standard Income
Levels (LLIL), Table 4, from the Department of Labor, with the
exception of family of 1, which income level can be based on the
poverty income level for a family of 1 if that rate is the
higher of the two. Rates for 2000 are shown on the
Income
Eligibility Table.
Vouchering
Procedures
Once an individual has been determined eligible for the
hiring credit and has been hired by an EZ business, an
Enterprise Zone Hiring Credit Voucher will be issued. The
voucher should be retained for income tax purposes. A copy of
every voucher is on file with the Zone office in the event a
voucher is misplaced or lost.
Hiring credit information,
general enterprise zone assistance, job training programs, and
enrolled or eligible participants can be obtained by contacting
the One Stop
Centers.
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Employee
Questionnaire
The
Employee
Questionnaire is online in a PDF format. If you need
assistance, please contact the
EZ
Manager or the
Sutter
County One Stop or the
Yuba County
One Stop.
Hiring
Credit Update
Check out whose taking part of the
Hiring Credit
Program. A list of those zone businesses currently receiving tax
credits under the Enterprise Zone Hiring Credit Program can be
found by
clicking the link here.
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