California New Employment Credit

California’s new employment credit expires this year. The credit is for employers that increase their workforce and have applied for the credit. So unless you applied and received approval from the FTB, you are not eligible for the credit.

The maximum credit is equal to 35% of the qualified wages paid. However, the credit amount will be decreased if there is a net decrease in the taxpayer’s total number of California full-time equivalent employees.

In addition, the credit only applies to employers in designated geographic areas (generally an enterprise zone or HD designated high unemployment area).

Furthermore, certain industries are excluded from the credit (such as staffing agencies, retail, foodservice, bars).