Establishes the work opportunity tax credit for businesses with fifty employees or less for hiring a long term unemployed person

Section two amends subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law by adding a new clause to establish the work opportunity tax credit.

Section three amends section 606 of the tax law by adding a new subsection (ccc), which establishes the work opportunity tax credit. It provides that a taxpayer shall be allowed a credit of two thousand four hundred dollars for each long term unemployed person hired during a taxable year. The credit is applicable to businesses that have fifty or fewer employees. A "long term unemployed person" is defined as an individual who has been a resident of New York for three years immediately preceding hiring and who, prior to being hired by the business eligible for the credit, had been unemployed and receiving public assistance for six consecutive months or more, and is retained for full-time unemployment by such business for at least one year.

Section four establishes that this act shall take effect immediately and apply to taxable years beginning on and after January 1, 2017.

Justification

As our economy continues to recover from the Great Recession, the longterm unemployment rate has remained unacceptably high. Studies across the board show that those who have been unemployed for a longer period of time have a much harder chance of landing that next job. Current statistics from the U.S Bureau of Labor reflect that the number of long- term unemployed persons remains at levels more than twice as high as those prior to the Great Recession. The problem is far-reaching with national unemployment rates revealing that despite recent job growth, the long-term unemployed continue to make up approximately 30% of the unemployed in all age and education ranges.

At the same time, studies have shown that one of the keys to economic growth lies within small businesses. The growth of small businesses is critical to ensuring continued innovation and opportunity, all the while diversifying our economy. Small businesses are the engine behind job expansion and a strong economy.

This legislation aims to address two issues: long-term unemployment, and small business growth. By providing a tax credit to small businesses for each long-term unemployed individual they hire and retain as a new employee, this bill will ultimately spur job creation, provide an added incentive to hire an individual who has had more difficulty finding work than others, and provide much-needed tax relief to small businesses.

Prior legislative history

None.

Fiscal implications for state and local governments

None.

Effective date

This act shall take effect immediately and apply to taxable years beginning on and after January 1, 2017.