Bill Text: NJ S2604 | 2024-2025 | Regular Session | Introduced
Bill Title: Establishes program to incentivize hiring and continued employment of individuals with developmental disabilities.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-02-08 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S2604 Detail]
Download: New_Jersey-2024-S2604-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
SYNOPSIS
Establishes program to incentivize hiring and continued employment of individuals with developmental disabilities.
CURRENT VERSION OF TEXT
As introduced.
An Act incentivizing the hiring and continued employment of individuals with developmental disabilities and supplementing Title 26 of the Revised Statutes, P.L.1945, c.162 (C.54:10A-1 et seq.), and chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Certified employer" means an employer in this State that has received a tax credit certificate from the director after the director has determined that the employer:
(1) provides employer-sponsored insurance that meets the requirements of minimum essential coverage, as that term is defined in 26 U.S.C. s.5000A(f)(1), to an applicable eligible individual employed by the certified employer; and
(2) fulfills the eligibility criteria set forth in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Developmental disability" means a severe, chronic disability that: (1) is attributable to a mental or physical impairment or combination of mental or physical impairments; (2) is manifest before age 22; (3) is likely to continue indefinitely; (4) results in substantial functional limitations in an area of major life activity; and (5) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment, or other services that are of lifelong or extended duration and are individually planned and coordinated. Developmental disability includes, but is not limited to, severe disabilities attributable to an intellectual disability, autism, cerebral palsy, epilepsy, spina bifida, or other neurological impairments where the above criteria are met.
"Director" means Director of the Division of Developmental Disabilities in the Department of Human Services.
"Division" means the Division of Developmental Disabilities in the Department of Human Services.
"Eligible individual" means an individual with a developmental disability.
"Program" means the program established pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
2. a. The director shall establish and administer a program to provide tax incentives to certified employers for the hiring and continued employment of eligible individuals with developmental disabilities. The director is authorized to allocate up to $2,000,000 of tax credits for the program for each calendar year beginning on the January 1 next following enactment.
b. To participate in the program, an employer shall, in a form prescribed by the director, apply annually to the division by January 15 to claim the credit based on eligible individuals hired and employed during the preceding calendar year. As part of the application, the employer shall:
(1) agree to allow the Division of Taxation in the Department of the Treasury to share the employer's tax information with the division, provided that any information shared pursuant to this paragraph shall be confidential by law and privileged and shall not be subject to P.L.1963, c.71 (C.47:1A-1 et seq.);
(2) allow the division and its agents access to limited and specific information necessary to monitor compliance with program eligibility requirements, provided that information accessed pursuant to this paragraph shall be confidential by law and privileged, shall not be subject to P.L.1963, c.71 (C.47:1A-1 et seq.), and shall only be used for the stated purpose of this section; and
(3) demonstrate that the employer has satisfied program eligibility requirements and has provided all the information necessary, including the number of hours worked by any eligible individual, for the director to compute an actual amount of credit allowed.
c. After reviewing an employer's application and finding it sufficient, the director shall issue a tax credit certificate to an employer by March 31. Each certificate shall include, but not be limited to, the name and employer identification number of the certified employer, the amount of credit that the certified employer may claim, and any other information as deemed necessary by the Director of the Division of Taxation in the Department of the Treasury.
d. (1) Unless otherwise required pursuant to paragraph (2) of this subsection, a certified employer shall be entitled to a tax credit in an amount equal to the product of $1 and the number of hours worked by each eligible individual for the certified employer in this State during that eligible individual's period of employment. The credit shall not be allowed unless the eligible individual has worked in the State for a minimum of 500 hours for the certified employer, and the credit shall not exceed $2,000 per eligible individual employed by the certified employer.
(2) In determining the amount of a tax credit that any employer may claim, the director shall review all applications submitted for tax credits under the program and, to the extent that the total amount claimed by certified employers exceeds the amount allocated for the program in that calendar year, shall issue credits on a pro rata basis corresponding to each certified employer's share of the total claimed amount.
e. (1) A certified employer may claim a credit for each eligible employee during the period starting on the day the employee is hired and ending on December 31 of the immediately succeeding calendar year or the last day of the employee's employment by the certified employer, whichever comes first.
(2) (a) If an eligible individual has worked in excess of 500 hours between the date of hire and December 31 of that year, an employer may elect to compute and claim a credit for the employee for that year based on hours worked by December 31.
(b) Alternatively, the employer may elect to include those hours worked by the eligible individual in the computation of the credit in the year immediately succeeding the year in which the eligible individual was hired. If the certified employer so elects, the credit shall be computed on the basis of all hours worked by the eligible individual from the date of hire to the earlier of the last day of employment or December 31 of the year immediately succeeding the eligible individual's date of hire.
(3) A certified employer shall not claim a tax credit for hours worked by an eligible individual in excess of 2,000 hours. A certified employer shall not claim a tax credit more than once with respect to any eligible individual and shall not aggregate hours worked by two or more employees to reach the minimum number of hours required.
3. The director shall annually provide to the Director of the Division of Taxation in the Department of the Treasury program information including, but not limited to, the number of certified employers participating in the program, unique identifying information for each certified employer, the number of eligible individuals employed by each certified employer, unique identifying information for each eligible individual employed by the certified employers, the number of hours worked by eligible individuals, the total dollar amount of claims for credit, and the dollar amount of credit granted to each certified employer.
4. The director, in
consultation with the Director of the Division of Taxation in the Department of
the Treasury, shall, pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations to effectuate
the purposes of sections 1 through 3 of P.L. ,
c. (C. through C. ).
5. a. A taxpayer that has
received a tax credit certificate from the Director of the Division of
Developmental Disabilities in the Department of Human Services pursuant to
section 2 of P.L. ,
c. (C. ) (pending before the Legislature as this bill) shall be
allowed a credit against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) in an amount equal to the amount shown on the tax credit
certificate.
b. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), for a privilege period, when taken together with any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall not exceed 50 percent of the tax otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The priority in which credits allowed pursuant to this section and any other credits shall be taken shall be determined by the Director of the Division of Taxation. The amount of the credit otherwise allowable under this section which cannot be applied for the privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 may be carried over, if necessary, to the seven privilege periods following the privilege period for which the credit was allowed.
6. a. A taxpayer that has
received a tax credit certificate from the Director of the Division of
Developmental Disabilities in the Department of Human Services pursuant to
section 2 of P.L. ,
c. (C. ) (pending before the Legislature as this bill) shall be
allowed a credit against the tax otherwise due for the taxable year under the
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an
amount equal to the amount shown on the tax credit certificate.
b. The amount of the credit applied pursuant to this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50 percent of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the business or professional activity in which the taxpayer employs the eligible individual during that taxable year, bears to the taxpayer's entire gross income for that year. The amount of the credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried over, if necessary to the seven taxable years following the taxable year for which the credit was allowed.
c. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
d. A New Jersey S corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
7. This act shall take effect immediately, and sections 5 and 6 shall apply to privilege periods and taxable years beginning on and after the January 1 next following enactment.
STATEMENT
This bill establishes a program to incentivize the hiring and continued employment of individuals with developmental disabilities. The bill authorizes the Director of the Division of Developmental Disabilities in the Department of Human Services to allocate up to $2,000,000 of tax credits for the program for each calendar year beginning on the January 1 next following the bill's date of enactment.
Under the bill, the director would be required to administer the program, which would provide corporation business tax and gross income tax credits to certified employers for hiring and employing individuals with developmental disabilities in the State. The bill defines "developmental disability" as a severe, chronic disability that: (1) is attributable to a mental or physical impairment or combination of mental or physical impairments; (2) is manifest before age 22; (3) is likely to continue indefinitely; (4) results in substantial functional limitations in an area of major life activity; and (5) reflects the need for a combination and sequence of special interdisciplinary or generic care, treatment, or other services that are of lifelong or extended duration and are individually planned and coordinated. Developmental disability includes, but is not limited to, severe disabilities attributable to an intellectual disability, autism, cerebral palsy, epilepsy, spina bifida, or other neurological impairments where the above criteria are met.
To participate in the program, an employer is required to apply annually to the Division of Developmental Disabilities in the Department of Human Services to claim a tax credit based on the number of hours worked by eligible individuals hired and employed by the employer during the preceding calendar year. The director is required to issue a tax credit certificate to certified employers by March 31 of each year.
Under the bill, a certified employer would be entitled to a tax credit equal to the product of $1 multiplied by the number of hours worked by each eligible individual hired and employed by the certified employer during that individual's period of employment, provided that a credit is not allowed unless the individual has worked in the State for a minimum of 500 hours for the employer. To satisfy this requirement, an employer may elect to either: (1) compute and claim the credit for the calendar year based on an eligible individual's hours worked by December 31 of that year, provided that the individual has worked in excess of 500 hours between the date of hire and December 31; or (2) include those hours worked by the eligible individual in the computation of the credit in the year immediately succeeding the year in which the individual was hired, in which case the credit would be computed on the basis of all hours worked by the individual from the date of hire to the earlier of the last day of employment or December 31 of the year immediately succeeding the individual's date of hire. However, to the extent that the total amount claimed by all certified employers exceeds the amount allocated for the program in a calendar year, the director would be required to issue credits on a pro rata basis corresponding to each certified employer's share of the total claimed amount.
The bill prohibits certified employers from claiming a tax credit for hours worked by an eligible individual in excess of 2,000 hours, and caps the amount of the credit at $2,000 per eligible individual. In addition, the bill prohibits employers from claiming a tax credit more than once with respect to any eligible individual, and prohibits employers from aggregating the hours worked by two or more eligible individuals to reach the minimum number of hours required under the program.
