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FTB “Tax News” December 2009

Here is the December 2009 edition of the FTB’s “Tax News” newsletter.

This month’s edition includes a section on the “New Jobs Tax Credit:”

Will Your Client Qualify for the New Jobs Credit?

Newly enacted state law, ABX3 15 (Assembly Budget Committee, Stats. 2009 Third Extraordinary Session, Ch. 10) allows a potential income tax credit of $3,000 to a qualified taxpayer for each additional full-time employee hired. The total amount of the credit available to taxpayers is capped at $400 million.

This credit will not be subject to the 50 percent limitation for business credits in 2009. This credit does have an eight year carryover provision.

The credit must be claimed on a timely-filed original return received by us before the cut-off date. This cut-off date is defined as the last day of the calendar quarter within which we estimate the $400 million limit will be reached. The cut-off date has not yet been determined.

This credit is allowed for taxable years beginning on or after January 1, 2009.

An employer qualifies for the credit if both apply:

1. They employed a total of 20 or fewer employees on the last day of the preceding taxable year (for Calendar taxpayers this would be December 31, 2008).

2. They have a net increase in qualified full-time employees compared to the number of full-time employees employed in the preceding taxable year.

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