California New Jobs Tax Credit

About the Credit

  • Effective for taxable years beginning on or after January 1, 2009.
  • A new tax credit of $3,000 for each additional full-time employee hired is available to small businesses with 20 or less employees beginning January 1, 2009.
  • The credit must be claimed on a timely filed original return received by the Franchise Tax Board on or before a cut-off date specified by the Franchise Tax Board.

To Qualify

An employer will qualify for the credit if:

  • Each qualified full-time hourly employee is paid wages for a minimum of 35 hours per week.
  • On the last day of the preceding taxable year, they employed a total of 20 or fewer employees.
  • There is a net increase in full-time employees compared to the number of full-time employees employed in the preceding taxable year.

An employer may not claim the credit for those employees who are any of the following:

  • Certified as a qualified employee in an enterprise zone, targeted tax area, a manufacturing enhancement area, or a local agency military base recovery area.
  • An employee whose wages are included in calculating any other credit allowed.

Claiming the Credit

  •  Claim the credit on a 2009 Personal Income Tax or Business Entity Tax Return using the credit form for the New Jobs Tax Credit.

More Information