Bill Text: NJ S4120 | 2024-2025 | Regular Session | Introduced
Bill Title: Provides corporation business tax credits and gross income tax credits to businesses employing and retaining certain neurodiverse individuals.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-30 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S4120 Detail]
Download: New_Jersey-2024-S4120-Introduced.html
Sponsored by:
Senator ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Provides corporation business tax credits and gross income tax credits to businesses employing and retaining certain neurodiverse individuals.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the employment of neurodiverse individuals and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. (1) A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the wages paid by the taxpayer during the privilege period to a full-time or part-time qualified neurodiverse employee, subject to the limitations set forth in this subsection.
(2) The credit for wages paid to a full-time qualified neurodiverse employee shall not exceed:
(a) $7,000 per qualified neurodiverse employee for any privilege period in which the employee was not employed by the taxpayer in the preceding privilege period;
(b) $8,000 per qualified neurodiverse employee for the second consecutive privilege period in which the taxpayer pays wages to the employee; and
(c) $9,000 per qualified neurodiverse employee for the third consecutive privilege period, and each consecutive privilege period thereafter, in which the taxpayer pays wages to the employee.
(3) The credit for wages paid to a part-time qualified neurodiverse employee shall not exceed $4,500 per part-time qualified neurodiverse employee for each privilege period in which the taxpayer pays wages to the employee.
b. (1) To claim the credit provided pursuant to this section, a taxpayer shall submit an application to the director for certification that one or more employees meet the criteria of a qualified neurodiverse employee for purposes of qualifying for the credit. The director shall also certify whether a qualified neurodiverse employee is employed on a full-time or part-time basis, and the periods of employment for each employee. The director shall establish an application process and prescribe the form and manner through which a taxpayer may submit an application for the certification.
(2) The director shall review each application for certification submitted by a taxpayer in accordance with this section and make a determination regarding the approval of an application for certification within 90 calendar days of the date a complete application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit. The contents of the certification shall state the fact of the certification and not disclose any private or confidential health information.
(3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date the application is submitted, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section.
c. All information regarding a qualified neurodiverse employee which is obtained or compiled in connection with the certification and which may be identified with the qualified neurodiverse employee shall not be released to a person other than the qualified neurodiverse employee, except as provided by subsection d. of this section, unless the qualified neurodiverse employee provides written permission to the division for the release of the information, provided however that the division may release program statistics so classified as to prevent the identification of a particular qualified neurodiverse employee or any health information related to the employee.
d. The director may confirm to the employer of a qualified neurodiverse employee, upon application of the employer, the fact that a qualified neurodiverse employee has been so certified.
e. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law shall be as prescribed by the Director of the Division of Taxation. The amount of credits 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, together with any other payments, credits, deductions, and adjustments allowed by law, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability for a privilege period to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162. 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 (C.54:10A-1 et seq.) may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the credit is allowed.
f. As used in this section:
"Director" means the Director of the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development.
"Division" means the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development.
"Full-time" means, with respect to an employee whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., employment by a taxpayer, who is subject to the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), for at least 35 hours per week, or the rendering of any other standard of service generally accepted by custom or practice as full-time employment.
"Part-time" means, with respect to an employee whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., employment by a taxpayer, who is subject to the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), for less than 35 hours per week, or the rendering of any other standard of service generally accepted by custom or practice as part-time employment.
"Qualified neurodiverse employee" means a person, who:
(1) works and is paid wages at a rate of not less than the minimum wage rate pursuant to section 5 of P.L.1966, c.133 (C.34:11-56a4);
(2) works in a qualifying role, as determined by the director, related to the science, technology, engineering, math, or artificial intelligence fields, except not including any person who works for the taxpayer as an independent contractor or on a consulting basis; and
(3) is considered to be neurodiverse in accordance with guidelines to be issued by the director.
2. a. (1) A taxpayer shall be allowed a credit against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for the wages paid to a full-time or part-time qualified neurodiverse employee, subject to the limitations set forth in this subsection.
(2) The credit for wages paid to a full-time qualified neurodiverse employee shall not exceed:
(a) $7,000 per qualified neurodiverse employee for any taxable year in which the employee was not employed by the taxpayer in the preceding taxable year;
(b) $8,000 per qualified neurodiverse employee for the second consecutive taxable year in which the taxpayer pays wages to the employee; and
(c) $9,000 per qualified neurodiverse employee for the third consecutive taxable year, and each consecutive taxable year thereafter, in which the taxpayer pays wages to the employee.
(3) The credit for wages paid to a part-time qualified neurodiverse employee shall not exceed $4,500 per part-time qualified neurodiverse employee for each taxable year in which the taxpayer pays wages to the employee.
b. (1) To claim the credit provided pursuant to this section, a taxpayer shall submit an application to the director for certification that one or more employees meet the criteria of a qualified neurodiverse employee for purposes of qualifying for the credit. The director shall also certify whether a qualified neurodiverse employee is employed on a full-time or part-time basis, and the periods of employment for each employee. The director shall establish an application process and prescribe the form and manner through which a taxpayer may submit an application for a certification.
(2) The director shall review each application for certification submitted by a taxpayer in accordance with this section and make a determination regarding the approval of an application for certification within 90 calendar days of the date a complete application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit. The contents of the certification shall state the fact of the certification and not disclose any private or confidential health information.
(3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date a complete application is received, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section.
c. All information regarding a qualified neurodiverse employee which is obtained or compiled in connection with the certification and which may be identified with the qualified neurodiverse employee shall not be released to a person other than the qualified neurodiverse employee, except as provided by subsection d. of this section, unless the qualified neurodiverse employee provides written permission to the division for the release of the information, provided however that the division may release program statistics so classified as to prevent the identification of a particular qualified neurodiverse employee or any health information related to the employee.
d. The director may confirm to the employer of a qualified neurodiverse employee, upon application of the employer, the fact that a qualified neurodiverse employee has been so certified.
e. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under the gross income tax, but the amount of credit of the taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
(2) A taxpayer that is a New Jersey S corporation shall not be allowed the 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.
f. The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the Director of the Division of Taxation. The amount of a tax credit allowed pursuant to this section, together with any payments, credits, deductions, and adjustments allowed by law, shall not reduce the amount of tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., to an amount less than zero. The amount of credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried forward, if necessary, to the seven taxable years following the taxable year for which the credit is allowed.
g. As used in this section:
"Director" means the Director of the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development.
"Division" means the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development.
"Full-time" means, with respect to an employee whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., employment by a taxpayer, who is subject to the tax imposed pursuant to pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for at least 35 hours per week, or the rendering of any other standard of service generally accepted by custom or practice as full-time employment.
"Part-time" means, with respect to an employee whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., employment by a taxpayer, who is subject to the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for less than 35 hours per week, or the rendering of any other standard of service generally accepted by custom or practice as part-time employment.
"Qualified neurodiverse employee" means a person, who:
(1) works and is paid wages at a rate of not less than the minimum wage rate pursuant to section 5 of P.L.1966, c.133 (C.34:11-56a4);
(2) works in a qualifying role, as determined by the director, related to the science, technology, engineering, math, or artificial intelligence fields, except not including any person who works for the taxpayer as an independent contractor or on a consulting basis; and
(3) is considered to be neurodiverse in accordance with guidelines to be issued by the director.
3. The Director of the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development, in consultation with the Director of the Division of Taxation in the Department of the Treasury, shall adopt rules and regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as necessary to implement the provisions of sections 1 and 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).
4. This act shall take effect immediately and shall first apply to privilege periods and taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill provides corporation business and gross income tax credits to taxpayers that employ certain neurodiverse individuals that work in qualifying STEM or artificial intelligence fields. The bill requires the Director of the Division of Vocational and Rehabilitation Services in the Department of Labor and Workforce Development to certify that an individual works in a qualifying role and is considered to be neurodiverse in accordance with guidelines to be issued by the director. The credit for wages paid to a full-time qualified neurodiverse employee increases in amount depending on the number of consecutive years in which a taxpayer pays wages to the individual, as follows: not more than $7,000 per employee in the first year of employment; not more than $8,000 per employee in the second consecutive year of employment; and not more than $9,000 per employee in the third consecutive year of employment and each consecutive year of employment thereafter. The credit amount for wages paid to a part-time employee would not exceed $4,500 per employee in any privilege period or taxable year.
