Establishes business franchise, personal income, insurance franchise and banking franchise tax credits for a portion of the wages paid to newly hired post 9/11 veterans

Summary of provisions

Section 1: Amends Tax Law section 210 to add a new subdivision 23-a to establish an allowance of a tax credit for employment of certain veter- ans against the New York State corporate franchise tax. To qualify for the tax credit the employer who pays the corporate franchise tax must hire a qualified veteran. A qualified veteran is one who: A) served on active duty in the United States Army, Navy, Air Force, Marines, Coast Guard or reserves thereof, or the National Guard who was released from active duty after September 11, 2001. 18) was hired after January 1, 2013 and before January 1, 2014. C) has not been employed with a full time job within the past six months, and D) was not hired to replace another employee by such employer. The amount of the corporate fran- chise tax credit is 10 percent of the qualified wages of any such veter- an up to a cap of $10,000, except for disabled veterans, whose tax cred- it is 15 percent of the qualified wages of such veteran up to a cap of $15,000. The bill provides for a carryover of the tax credit if it cannot be used by such taxpayer in the same tax year.

Sections 2 and 3: Amends Tax Law section 606 to add a new clause (xxxv) and subdivision (a-2) to establish an allowance of a tax credit for employment of certain veterans against the New York State personal income tax. To qualify for the tax credit the employer who pays the personal income tax must hire a qualified veteran. A qualified veteran is one who: A) served on active duty in the United States Army, Navy, Air Force, Marines, Coast Guard or reserves thereof, or the National Guard who was released from active duty after September 11, 2001. B) was hired after January 1, 2013 and before January 1, 2014. C) has not been employed with a full time job within the past six months, and D) was not hired to replace another employee by such employer. The amount of the personal income tax credit is 10 percent of the qualified wages of any such veteran up to a cap of $10,000, except for disabled veterans, whose tax credit is 15 percent of the qualified wages of such veteran up to a cap of $15,000. The bill provides for a carryover of the tax credit if it cannot be used by such taxpayer in the same tax year.

Section 4: Amends Tax Law section 1456 to add a new subsection (e-1) to establish an allowance of a tax credit for employment of certain veter- ans against the New York State franchise tax on banking corporations. To qualify for the tax credit the employer who pays the bank corporation

franchise tax must hire a qualified veteran. A qualified veteran is one who: A) served on active duty in the United States Army, Navy, Air Force, Marines, Coast Guard or reserves thereof, or the National Guard who was released from active duty after September 11, 2001. B) was hired after January 1, 2013 and before January 1, 2014. C) has not been employed with a full time job within the past six months, and D) was not hired to replace another employee by such employer. The amount of the banking corporation franchise tax credit is 10 percent of the qualified wages of any such veteran up to a cap of $10,000, except for disabled veterans, whose tax credit is 15 percent of the qualified wages of such veteran up to a cap of $15,000. The bill provides for a carryover of the tax credit if it cannot be used by such taxpayer in the same tax year.

Section 5: Amends Tax Law section 1511 to add a new subdivision (g-1) to establish an allowance of a tax credit for employment of certain veter- ans against the New York State franchise tax on insurance corporations. To qualify for the tax credit the employer who pays the insurance corpo- ration franchise tax must hire a qualified veteran. A qualified veteran is one who: A) served on active duty in the United States Army, Navy, Air Force, Marines, Coast Guard or reserves thereof, or the National Guard who was released from active duty after September 11, 2001. B) was hired after January 1, 2013 and before January 1, 2014. C) has not been employed with a full time job within the past six months, and D) was not hired to replace another employee by such employer. The amount of the insurance corporation franchise tax credit is 10 percent of the quali- fied wages of any such veteran,. up to a cap of $10,000, except for disabled veterans, whose tax credit.is 15 percent of the qualified wages of such veteran up to a cap of $15,000.The bill provides for a carryover of the tax credit if it cannot be used by such taxpayer in the same tax year.

Section 6: This act shall take effect immediately, and shall be deemed to have full force and effect on or after January 1, 2013.

Justification

Tens of thousands of New Yorkers have served with distinctions in the various conflicts waged after the September 11 attack on our country. Too many of these men and women, who risked their lives to protect our life and liberty, have returned home to a weak job market and diminished employment opportunities. According to the Bureau of Labor Statistics, in 2011 the overall unemployment rate for veterans in New York State was 7.7% but the unemployment rate for veterans who had served after the 9/11 attacks was a stunning 16.7%. This rate is far above the general unemployment rate in New York, which according to the New York Labor Bureau was an average of 8.2%.

The IDC believes that New York should do something to lower this into- lerably high unemployment rate for young veterans. The tax credit proposed in this legislation is crafted specifically to benefit this group. Any private employer in New York, regardless of size, would be eligible for a credit equal to 10% of the gross wages of a previously unemployed post-9/11 veteran they hired, up to a maximum of $10,000. There is no limit to the number of credits any business can claim, and

they would be able to carry over the credit for three tax years if they did not use it immediately. This credit will apply for young and unem- ployed veterans hired between January 2013 and January 2015. The job that the veteran is hired must be full time and not replace any existing employees.

Many of these young people who chose to serve after 9/11 have come back from war with serious and disabling injuries. Unfortunately, Any indi- vidual with disabilities is at a disadvantage in the job market. The IDC has taken this disadvantage into account by making the credit higher if a business hires a young, unemployed and disabled veteran. In this case, the business can claim a credit equal to 15% of gross wages, up to $15,000.

The IDC believes that instituting this proposed tax credit will help lower the extremely high unemployment rate that this cohort of veterans face. This is just one small way in which New Yorkers can ensure that those who chose to serve to protect us all can have the dignity they deserve.

Legislative history

New legislation

Fiscal implications

Fiscal implications to the state to be determined

Effective date

This act shall take effect immediately and shall be deemed to have been in full force and effect on and after January 1, 2013.