Burzichelli, Singleton, DeAngelo,
Benson, Coutinho & Ramos Legislation Would Provide Tax Credits to Small
Businesses
(TRENTON) – By a vote of 47-28-2, the
General Assembly on Thursday granted final legislative approval to a bill
sponsored by Assemblymen John Burzichelli, Troy Singleton, Wayne DeAngelo,
Daniel Benson, Albert Coutinho and Ruben Ramos, Jr. to provide incentives for
small businesses to hire unemployed residents.
The
bill, which now heads to the Governor’s desk, is part of a comprehensive job
creation effort recently laid out by Assembly Democrats.
“This is
a two-fold approach to help jumpstart our economy,” said Burzichelli
(D-Cumberland/Gloucester/Salem). “It will boost opportunities for those
desperately in need of a job while also helping small businesses hire
much-needed employees.”
The “New
Jobs for New Jersey Act” (A-3312/S-2211) establishes a New Jobs for New Jersey
tax credit program to provide incentives to small private sector employers who
increase their workforce by hiring unemployed workers.
“This is
about getting people back on their feet and gainfully employed in a stable job
environment,” said Singleton (D-Burlington). “It’s also a great way to help
small businesses cover the cost for hiring additional employees that they might
not otherwise be able to afford.”
The bill
makes an employer of 100 or fewer full-time employees eligible for a refundable
tax credit against the corporation business tax or the gross income tax,
whichever applies to the employer, for each eligible individual employed on a
full-time basis during a tax year, if the following requirements are
met:
·
The eligible individual is hired by the employer
after October 1, 2012, is employed full-time during the tax year for which the
tax credit is provided, was not previously employed by the employer, and did not
have full-time employment for 30 or more days prior to being hired by the
employer;
·
The employer employs more employees than the average
during the during the 12-month period immediately prior to October 1, 2012;
and
·
The commissioner of the state Department of Labor
approves an application submitted by the employer for the tax credit.
“Small
businesses are the back bone of our economy,” said DeAngelo
(D-Mercer/Middlesex). “When they thrive, so does New Jersey. This bill speaks
to that underlying principle while targeting those who need help the most – the
long-term unemployed.”
“This is
a sound approach to job stimulation because it does not require an upfront
expense on the part of the state and only provides a tax credit once an employer
produces results,” said Benson (D-Mercer/Middlesex). “In the end, this is a
much needed win for job-seekers.”
“With
unemployment still hovering near 10 percent, this initiative is crucial to
getting out-of-work residents back on their feet,” said Coutinho (D-Essex). “It
will also help small businesses grow and expand when they might not otherwise be
able to afford to do so.”
The bill
sets the amount of the refundable tax credit for each eligible individual
employed during a tax year as the total amount of the employer payroll taxes
paid during that tax year by the employer with respect to that individual.
Employer payroll taxes include the portion paid by employers of State
unemployment, temporary disability, and workforce development and basic skills
assessments, and federal Social Security, Medicare, and unemployment taxes.
“Small
businesses employ a majority of our workers, but when the recession all but
froze up credit, it made it hard for them to expand their operations,” said
Ramos. “This will help offset some of the costs for them to hire additional
personnel while providing a stable job for residents in dire need of
work.”
An employer may apply for and qualify for a tax credit under the bill
with respect to tax years 2013, 2014, and 2015. If the employer’s application
is approved for any of those three years, the employer may continue to receive
the tax credit for any of the four tax years following that tax year during
which the employer meets the requirements of the bill.
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