Create Tax Credits for Hiring

Section 1. The tax law is amended by adding a new section 44 to read as follows:

§ 44. Hire-Now tax credit. (a) Allowance of credit. A taxpayer, which is subject to tax under article nine-A or twenty-two of this chapter and which creates a new job, shall be allowed a credit against such tax. The amount of the credit allowed under this section shall be equal to the product of 6.85 percent and the gross wages paid for each new employee. The credit shall not be more than five thousand dollars for any new employee for one full year of employment; if a new employee has been hired for less than a full tax year this amount shall be prorated and apportioned to each tax year but shall in no way decrease the full three consecutive years of credit eligibility. The taxpayer may claim this credit for each new employee for a period of three consecutive years of employment. The taxpayer may offset quarterly estimated tax returns with the amount of this credit earned in any previous quarter.

(b) Unemployment enhancement. For calendar years two thousand twentyone and two thousand twenty-two if a new employee was receiving unemployment insurance benefits at the time of hire, an additional three thousand dollar credit will be allowed for the first full year of employment.

(c) Definitions. As used in this section, the following terms shall have the following meanings:

(1) "New employee" shall mean any full time employee that is hired by the taxpayer after July first, two thousand twenty and before April

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD10855-01-9

S. 5068 2

first, two thousand twenty-one, that causes the total number of employees to increase above base employment or credit employment, whichever is higher.

(2) "Base year" shall mean calendar year two thousand nineteen.

(3) "Base employment" shall mean the average number of full time employees or full time equivalent employees during the base year. For a new business, base employment shall begin at zero.

(4) "Credit employment" shall mean base employment plus the number of new employees for which a credit is earned for the prior tax years.

(d) Replacement employees. If one or more new employees for which a credit was earned leaves the payroll during the same taxable year that an individual is hired by the taxpayer to work in this state, causing the taxpayer's total employment to equal an amount that is above base employment but at or below the computed credit employment for the taxable year, the credit eligibility period for the individual hired during the taxable year shall be three years minus the amount of time (rounded to the next full month) that the taxpayer received the credit for the departing employee.

(e) No credit shall be allowed under this section to a taxpayer for any new employee if the taxpayer claims any other credit under this article for such new employee where the basis of such other credit is an increase in employment.

§ 2. Section 210-B of the tax law is amended by adding a new subdivision 53 to read as follows:

53. Hire-Now tax credit. (a) Allowance of credit. A taxpayer will be allowed a credit, to be computed as provided in section forty-four of this chapter, against the tax imposed by this article.

(b) Application of credit. The credit allowed under this subdivision for any taxable year may not reduce the tax due for such year to less than the higher of the amounts prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount, any amount of credit thus not deductible in such taxable year will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest will be paid thereon.

§ 3. Section 606 of the tax law is amended by adding a new subsection (jjj) to read as follows:

(jjj) Hire-Now tax credit. (1) A taxpayer will be allowed a credit, to the extent allowed under section forty-four of this chapter, against the tax imposed by this article.

(2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year exceeds the taxpayer's tax for such year, the excess will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest will be paid thereon.

§ 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xliv) to read as follows: (xliv) Hire-Now tax credit Amount of credit under under subsection (jjj) subdivision fifty-three of

section two hundred ten-B

§ 5. This act shall take effect immediately.