About tax program
The New Employment Credit is a CA income tax credit for businesses located in former enterprise zones, as well as areas with high unemployment or poverty. It excludes temporary help agencies, retailers, and food services, unless those businesses have less than $2 million in gross receipts (small businesses).
The amount of the tax credit award depends on each company’s unique set of factors, focused primarily on future capital investment, employment growth and economic impact to the state of California.
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NEC can reduce an employer’s state income tax liability by as much as $56,000 per qualified employee hired
Dollar-for-dollar reduction in your state income tax liability Improved cash flow
Improved cash flow
STATE INCOME TAX LIABILITY REDUCTION
Credits are generated when companies hire qualified net new employees each year. Qualified employees are those employees who:
- Are hired after January 1, 2014
- Receive starting wages that are at least 150% of the state’s minimum wage
- Are salaried full time employees or hourly employees working at least 35 hours per week
- Meet one of 5 conditions
- Unemployed for six months or more, not having completed a degree or course of study more than 12 months prior to hire (unemployed means not receiving wages, not self-employed, and not a full-time student)
- Veteran, separated from the armed forces within the past 12 months
- Recipient of the federal Earned Income Credit in the previous tax year
- Ex-offender convicted of a felony; or
- Сurrent recipient of CalWORKS or county general assistance (public assistance)
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