Establishes the work opportunity tax credit for businesses with fifty employees or less for hiring a long term unemployed person; provides a credit shall be allowed of up to $2,400; provides the total amount of credit provided statewide shall not exceed fifteen million dollars.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5239
SPONSOR: Cook (MS) TITLE OF BILL:
An act to amend the tax law, in relation to establishing the work oppor-
tunity tax credit
PURPOSE OR GENERAL IDEA OF BILL:
To provide a state tax credit for small businesses in order to incentiv-
ize the hiring of long term unemployed persons.
SUMMARY OF PROVISIONS:
Section one of the bill amends section 210-B of the tax law by adding a
new subdivision 49, which establishes the work opportunity tax credit.
It provides that a taxpayer shall be allowed a credit of two thousand
four hundred dollars for each long term unemployed person hired during a
taxable year. The credit is applicable to businesses that have fifty or
fewer employees. A "long term unemployed person" is defined as an indi-
vidual who has been a resident of New York for three years immediately
preceding hiring and who, prior to being hired by the business eligible
for the credit, had been unemployed and receiving public assistance for
six consecutive months or more, and is retained for full-time unemploy-
ment by such business for at least one year.
Section two amends subparagraph (B) of paragraph 1 of subsection (i) of
section 606 of the tax law by adding a new clause to establish the work
opportunity tax credit.
Section three amends section 606 of the tax law by adding a new
subsection (ccc), which establishes the work opportunity tax credit. It
provides that a taxpayer shall be allowed a credit of two thousand four
hundred dollars for each long term unemployed person hired during a
taxable year. The credit is applicable to businesses that have fifty or
fewer employees. A "long term unemployed person" is defined as an indi-
vidual who has been a resident of New York for three years immediately
preceding hiring and who, prior to being hired by the business eligible
for the credit, had been unemployed and receiving public assistance for
six consecutive months or more, and is retained for full-time unemploy-
ment by such business for at least one year.
Section four establishes that this act shall take effect immediately and
apply to taxable years beginning on and after January 1, 2024.
JUSTIFICATION:
As our economy continues to recover from the Great Recession, the long
term unemployment rate has remained unacceptably high. Studies across
the board show that those who have been unemployed for a longer period
of time have a much harder chance of landing that next job. Current
statistics from the U.S Bureau of Labor reflect that the number of long
term unemployed persons remains at levels more than twice as high as
those prior to the Great Recession. The problem is far-reaching with
national unemployment rates revealing that despite recent job growth,
the long-term unemployed continue to make up approximately 30% of the
unemployed in all age and education ranges. At the same time, studies
have shown that one of the keys to economic growth lies within small
businesses. The growth of small businesses is critical to ensuring
continued innovation and opportunity, all the while diversifying our
economy. Small businesses are the engine behind job expansion and a
strong economy.
This legislation aims to address two issues: long-term unemployment, and
small business growth. By providing a tax credit to small businesses for
each longterm unemployed individual they hire and retain as a new
employee, this bill will ultimately spur job creation, provide an added
incentive to hire an individual who has had more difficulty finding work
than others, and provide much-needed tax relief to small businesses.
PRIOR LEGISLATIVE HISTORY:
2021/22 A.5300 S.637; 2019/20 A.8471 5.2119; 2017/18 S.1517
FISCAL IMPLICATIONS:
The total amount of the state tax credit is capped at $15 million in the
aggregate in a taxable year beginning January 1, 2024.
EFFECTIVE DATE:
This act shall take effect immediately and apply to taxable years begin-
ning on and after January 1, 2024.
STATE OF NEW YORK
________________________________________________________________________
5239
2023-2024 Regular Sessions
IN ASSEMBLY
March 7, 2023
___________
Introduced by M. of A. COOK, JACKSON, SEAWRIGHT, BUTTENSCHON, COLTON --
Multi-Sponsored by -- M. of A. STECK -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to establishing the work oppor-
tunity tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 210-B of the tax law is amended by adding a new
2 subdivision 59 to read as follows:
3 59. Work opportunity tax credit. (a) Allowance of credit. A taxpayer
4 shall be allowed a credit, against the tax imposed by this article, of
5 two thousand four hundred dollars for each long term unemployed person
6 hired during a taxable year. Such tax credit shall be applicable only to
7 businesses employing fifty or fewer employees. For the purposes of this
8 subdivision, a "long term unemployed person" shall be an individual who
9 has been a resident of New York for three years immediately preceding
10 hiring and who, prior to being hired by the business eligible for the
11 credit established pursuant to this subdivision, had been unemployed and
12 receiving public assistance for six consecutive months or more, and is
13 retained for full-time employment by such business for at least one
14 year.
15 (b) Application of credit. The credit allowed under this subdivision
16 for any taxable year shall not reduce the tax due for such year to less
17 than the fixed dollar minimum amount prescribed in paragraph (d) of
18 subdivision one of section two hundred ten of this article. However, if
19 the amount of credit allowed under this subdivision for any taxable year
20 reduces the tax to such amount or if the taxpayer otherwise pays tax
21 based on the fixed dollar minimum amount, any amount of credit thus not
22 deductible in such taxable year shall be treated as an overpayment of
23 tax to be credited or refunded in accordance with the provisions of
24 section one thousand eighty-six of this chapter. Provided, however, the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08370-01-3
A. 5239 2
1 provisions of subsection (c) of section one thousand eighty-eight of
2 this chapter notwithstanding, no interest shall be paid thereon. The
3 total amount of credit to be provided statewide for this credit, the
4 credit allowed under subsection (ooo) of section six hundred six of this
5 chapter and subdivision (ee) of section fifteen hundred eleven of this
6 chapter shall not exceed fifteen million dollars in the aggregate in a
7 taxable year.
8 (c) Credit recapture. For provisions requiring recapture of credit,
9 see section forty-four of this chapter.
10 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
11 of the tax law is amended by adding a new clause (l) to read as follows:
12 (l) Work opportunity tax creditAmount of credit under
13 under subsection (ooo)subdivision fifty-nine of
14 section two hundred ten-B
15 § 3. Section 606 of the tax law is amended by adding a new subsection
16 (ooo) to read as follows:
17 (ooo) Work opportunity tax credit. (1) Allowance of credit. A taxpayer
18 shall be allowed a credit, against the tax imposed by this article, of
19 two thousand four hundred dollars for each long term unemployed person
20 hired during a taxable year. Such tax credit shall be applicable only to
21 businesses employing fifty or fewer employees. For the purposes of this
22 subdivision, a "long term unemployed person" shall be an individual who
23 has been a resident of New York for three years immediately preceding
24 hiring and who, prior to being hired by the business eligible for the
25 credit established pursuant to this subsection, had been unemployed and
26 receiving public assistance for six consecutive months or more, and is
27 retained for full-time employment by such business for at least one
28 year.
29 (2) Application of credit. If the amount of the credit allowed under
30 this subsection for any taxable year shall exceed the taxpayer's tax for
31 such year, the excess shall be treated as an overpayment of tax to be
32 credited or refunded in accordance with the provisions of section six
33 hundred eighty-six of this article, provided, however, that no interest
34 shall be paid thereon. The total amount of credit to be provided state-
35 wide for this credit, the credit allowed under subdivision fifty-nine of
36 section two hundred ten-B of this chapter and subdivision (ee) of
37 section fifteen hundred eleven of this chapter shall not exceed fifteen
38 million dollars in the aggregate in a taxable year.
39 (3) Credit recapture. For provisions requiring recapture of credit,
40 see section forty-four of this chapter.
41 § 4. Section 1511 of the tax law is amended by adding a new subdivi-
42 sion (ee) to read as follows:
43 (ee) Work opportunity tax credit. (1) Allowance of credit. A taxpayer
44 shall be allowed a credit, against the tax imposed by this article, of
45 two thousand four hundred dollars for each long term unemployed person
46 hired during a taxable year. Such tax credit shall be applicable only to
47 businesses employing fifty or fewer employees. For the purposes of this
48 subdivision, a "long term unemployed person" shall be an individual who
49 has been a resident of New York for three years immediately preceding
50 hiring and who, prior to being hired by the business eligible for the
51 credit established pursuant to this subdivision, had been unemployed and
52 receiving public assistance for six consecutive months or more, and is
53 retained for full-time employment by such business for at least one
A. 5239 3
1 year. The total amount of credit to be provided statewide shall not
2 exceed fifteen million dollars in a taxable year.
3 (2) Application of credit. The credit allowed under this subdivision
4 shall not reduce the tax due for such year to be less than the minimum
5 fixed by paragraph four of subdivision (a) of section fifteen hundred
6 two or section fifteen hundred two-a of this article, whichever is
7 applicable. However, if the amount of the credit allowed under this
8 subdivision for any taxable year reduces the taxpayer's tax to such
9 amount, any amount of credit thus not deductible will be treated as an
10 overpayment of tax to be credited or refunded in accordance with the
11 provisions of section one thousand eighty-six of this chapter. Provided,
12 however, the provisions of subsection (c) of section one thousand eight-
13 y-eight of this chapter notwithstanding, no interest shall be paid ther-
14 eon. The total amount of credit to be provided statewide for this cred-
15 it, the credit allowed under subdivision fifty-nine of section two
16 hundred ten-B of this chapter and subdivision (ooo) of section six
17 hundred six of this chapter shall not exceed fifteen million dollars in
18 the aggregate in a taxable year.
19 (3) Credit recapture. For provisions requiring recapture of credit,
20 see section forty-four of this chapter.
21 § 5. This act shall take effect immediately and shall apply to taxable
22 years beginning on and after January 1, 2024 and shall apply to eligible
23 individuals hired on and after such effective date.
