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FTB on Jessica McClintock Implications

The FTB “Tax News” publication we had been anticipating since Oct. 31 has just been published to the FTB website. It contains this information about the implications of the Jessica McClintock appeal at BOE:

An employer who meets certain requirements may claim an enterprise zone hiring credit. (See R&TC Sections 17053.74 and 23622.7.) One of these requirements is that the employer hires a “qualified employee.” An individual who is eligible for the Job Training Partnership Act (JTPA) public assistance program may be considered a “qualified employee” for purposes of the enterprise zone hiring credit. The JTPA, which expired June 30, 2000, provided training and job placement assistance for qualified individuals who faced significant barriers to employment and suffered an economic disadvantage. The JTPA program also provided that 10 percent of its funds could be used to enroll individuals into the JTPA program if they suffered a barrier to employment but had no corresponding economic disadvantage.

On August 14, 2007, the Board of Equalization held in an unpublished decision, Appeal of Jessica McClintock, that individuals who had a documented barrier as defined under the JTPA 10 percent exception category could be considered qualified employees for purposes of the enterprise zone hiring credit. Accordingly, vouchers issued for employees hired on or before June 30, 2000, under this eligibility category with a documented employment barrier will be accepted as valid vouchers.

The following barriers to employment were recognized under the JTPA Program.

* Addict.
* Alcoholic.
* Basic skills deficient.
* Cash welfare recipient.
* Disabled individuals.
* Displaced homemaker.
* Homeless.
* Limited English language proficiency.
* Offender.
* Older worker.
* Pregnant/parenting youth.
* School dropout.
* Veteran.

The requirements of each of these barriers are set forth within the JTPA statutes and regulations including common documentation used to verify these barriers.

“Tax News” also includes a detailed explanation of how to understand the implications of AB 1550 with regard to the new Enterprise Zones.

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