Hiring Tax Credits

Enterprise Zone or LAMBRA Hiring Credits

Businesses may claim up to 50% of the qualified wages paid to a qualified employee as a credit against tax imposed on Enterprise Zone or LAMBRA income.

Hiring Credits can total $31,000+ in 5 years per eligible employee. Credits are based on the smaller of the actual hourly wage paid or 150% of the minimum hourly wage.

50% Year 1

40% Year 2

30% Year 3

20% Year 4

10% Year 5

Identification of hiring credit eligible employees is easy. Complete a Voucher Application form to determine if persons are from any of the targeted groups. You may also place a job order with “Sacramento Works” at no charge at 916-263-3744. “Sacramento Works” is a coordinated network Career Centers, employment programs, educational institutions and business assistance to help you find qualified job applicants to meet your requirements.

FORMS

ON-LINE completion - use Templates. (Opens a Word document with defined input fields for online completion. Use the 'Tab' key to advance from field to field. It may be saved on your computer, filled in and printed.)

Voucher Application Template (Microsoft Word)

Income Verification Worksheet Template (Microsoft Word)

OFF-LINE completion. (Opens a blank form to be printed and filled in manually.)

Voucher Application (Microsoft Word)

Income Verification Worksheet (Microsoft Word)

Qualified tax credit eligible employees include the following:

A person receiving services funded by the Workforce Investment Act;

A person who is a member of a targeted group defined in the federal Work Opportunity Tax Credit (WOTC) program;

A low income person;

A qualified dislocated worker which may include: unemployed due to plant closure, massive layoff (50 people or at least a third of the workforce); unemployed due to military base closure; unemployed due to seasonal or migrant work;

A disabled individual eligible and/or enrolled in or completed a state rehabilitation plan;

Veteran categories including: a service connected disabled veteran; Vietnam era veteran; campaign veteran; veteran separated from military service within the past 4 years;

An ex-offender;

A person eligible for or receiving public assistance including: Temporary Assistance to Needy Families (TANF—formerly AFDC); Food stamps; General assistance; federal Supplemental Security Income (SSI);

A participant in Welfare to Work activities under CalWORKS;

A Native American; and

A resident of a targeted employment area (TEA).

For list of suggested verification documents, please click the following link Documentation List.

LAMBRA businesses must meet a job creation requirement of creating a net increase in jobs within the first two taxable years.