The credit is available for each taxable year beginning on or after January 1, 2014, and before January 1, 2021. The NEC is based on middle class wages above $12 an hour and up to $28 an hour. Employers are allowed a maximum credit of $56,000 per employee for 5 years or 2,000 hours total and credits are calculated as 35% of wages each year for a total of 175%. In order to be allowed a credit, the qualified taxpayer must have a net increase in full-time employees in California, determined on an annual full-time equivalent basis. Full definitions for qualified taxpayer and qualified employee can be found in the Franchise Tax Board FAQs, here.
To qualify, employees must fit one of the following criteria: unemployed for 6 months, veterans within one year of separation, Earned Income Tax Credit recipients or ex-offenders and recipients of CalWorks or general assistance. The credit is targeted towards census tracts with the highest unemployment and poverty rates as well as Local Agency Military Base Recovery Areas (LAMBRAS) and current enterprise zone boundaries. To view a map of the Designated Geographic Areas that qualify, click here.
The Riverside County Workforce Development Center offers assistance to businesses applying for hiring credits. The Workforce Development Center’s Business Solutions team also assists in organizing recruitments, screening for a specific candidate pool, posting job openings on local, state and national websites, forwarding applicant resumes, conducting skill assessments and referring qualified jobseekers. For more information about the Riverside County Workforce Development Center, click here.