Committee Statement to Senate — Senate Bill No. 1958, New Jobs for New Jersey Tax Credit (May 5, 2021)

Summary

Assembly Commerce and Economic Development Committee statement to Senate, No. 1958, State of New Jersey, dated May 5, 2021, reporting Senate Bill No. 1958 favorably. The bill establishes a New Jobs for New Jersey tax credit program administered by the Commissioner of Labor and Workforce Development, with incentives for small private sector employers who hire unemployed workers. An eligible individual must be hired after April 1, 2021 and must not have had full-time employment for 30 or more days prior to being hired. The credit equals the employer payroll taxes paid during the tax year with respect to that individual. As reported by the committee, Senate Bill No. 1958 is identical to Assembly Bill No. 1679.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                          STATEMENT TO

                        SENATE, No. 1958

       STATE OF NEW JERSEY
                             DATED: MAY 5, 2021

          The Assembly Commerce and Economic Development Committee
      reports favorably Senate Bill No. 1958.
          This bill establishes a New Jobs for New Jersey tax credit program
      to be administered by the Commissioner of Labor and Workforce
      Development. The purpose of the program is to provide incentives to
      small private sector employers who increase their workforce by hiring
      unemployed workers.
          The bill makes an employer of 100 or fewer full-time employees
      eligible for a refundable New Jobs for New Jersey tax credit against
      the corporation business tax or the gross income tax, whichever
      applies to the employer, for each eligible individual employed by the
      employer on a full-time basis during a tax year, if the following
      requirements are met:
          1. The eligible individual is hired by the employer after April 1,
      2021, 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;
          2. The employer employs an average total number of full-time
      employees during the tax year for which the tax credit is provided
      which exceeds the average total number of full-time employees
      employed by the employer during the 12-month period immediately
      prior to April 1, 2021; and
          3. The employer submits an application for the tax credit in the
      manner required by the commissioner, the commissioner approves the
      application, and the employer provides, or makes available as
      requested by the commissioner, all information regarding the number,
      wages, and employer payroll taxes or any other information required
      by the commissioner.
          The bill sets the amount of the refundable tax credit provided to the
      employer 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, subject to the
      requirements of the bill. Employer payroll taxes include the portion
      paid by employers of State unemployment, temporary disability, and
      workforce development and basic skills assessments, and federal
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Social Security, Medicare, and unemployment taxes. The bill provides
that the employer receive the tax credit for the number of eligible
individuals newly-hired during the tax year, but not exceeding the net
increase in the number of full-time employees employed during the tax
year compared with the average total number employed during the 12-
month period immediately preceding April 1, 2021.
     An employer may apply for and qualify for a tax credit under the
bill with respect to tax years 2021, 2022, and 2023. 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.
     Upon a finding by the commissioner of employer compliance with
the bill’s requirements, the commissioner is required to certify to the
Director of the Division of Taxation that the employer is eligible for a
tax credit under this bill, the amount of the tax credit, and provide a
copy of the certification to the employer.
    As reported by the committee, Senate Bill No. 1958 is identical
to Assembly Bill No. 1679, which also was reported by the
committee.


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