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FTB “Tax News” January 2011

Here is the first edition of the FTB’s “Tax News” newsletter for 2011.

Of note is an item under “Tax Benefits for Employers” discussing the relationship between benefits under the federal HIRE Act and Enterprise Zone credits:

The employer is not required to reduce salary expenses by the amount of the new hire retention credit. No carryback is allowed, but this credit may be carried forward for 20 years. The WOTC and the new hire retention credit can both be claimed for the same employee.

Since there is no reduction to employer’s federal wage deduction, no adjustments are necessary for California tax purposes. In addition, these new federal tax benefits do not affect the state’s new jobs credit, form FTB 3527 or the enterprise zone credits, form FTB 3805Z.

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