SENATE, No. 3397

STATE OF NEW JERSEY

221st LEGISLATURE

 

INTRODUCED JUNE 6, 2024

 


 

Sponsored by:

Senator  ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

 

Co-Sponsored by:

Senator Diegnan

 

 

 

 

SYNOPSIS

     Provides corporation business tax and gross income tax credits for employers of certain persons with disabilities.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act providing credits against the corporation business and gross income tax for employing persons with disabilities, 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.  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) in an amount equal to 15 percent of the wages paid by the taxpayer during a privilege period to a qualified employee with a disability.  The credit provided pursuant to this section during a privilege period shall not exceed $2,000 per qualified employee with a disability.

     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 employee with a disability for purposes of qualifying for the credit.  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 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 employee with a disability which is obtained or compiled in connection with the certification and which may be identified with the qualified employee with a disability shall not be released to a person other than the qualified employee with a disability, except as provided by subsection d. of this section, unless the qualified employee with a disability 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 employee with a disability or that person’s disability.

     d. The director may confirm to the employer of a qualified employee with a disability, upon application of the employer, the fact that a qualified employee with a disability has been so certified.

     e.     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 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.

     “Qualified employee with a disability” means a person with a disability defined under section 3 of the federal “Americans with Disabilities Act of 1990,” Pub.L.101-336 (42 U.S.C. s. 12102), who is employed by the taxpayer for at least 35 hours a week, and paid wages at a rate of no less than $15 per hour.  A “qualified employee with a disability” shall not include any person with a disability who works for the taxpayer as an independent contractor or on a consulting basis.

 

     2.    a.  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., in an amount equal to 15 percent of the wages paid by the taxpayer during a taxable year to a qualified employee with a disability.  The credit provided pursuant to this section during a taxable year shall not exceed $2,000 per qualified employee with a disability.

     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 employee with a disability for purposes of qualifying for the credit.  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 employee with a disability which is obtained or compiled in connection with the certification and which may be identified with the qualified employee with a disability shall not be released to a person other than the qualified employee with a disability, except as provided by subsection d. of this section, unless the qualified employee with a disability 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 employee with a disability or that person’s disability.

     d. The director may confirm to the employer of a qualified employee with a disability, upon application of the employer, the fact that a qualified employee with a disability 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.  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.

     “Qualified employee with a disability” means a person with a disability defined under section 3 of the federal “Americans with Disabilities Act of 1990,” Pub.L.101-336 (42 U.S.C. s. 12102), who is employed by the taxpayer for at least 35 hours a week, and paid wages at a rate of no less than $15 per hour.  A “qualified employee with a disability” shall not include a person with a disability who works for the taxpayer as an independent contractor or on a consulting basis.

     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 this act.

 

     4.    This act shall take effect immediately and 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 persons with disabilities.  The credit would be for up to 15 percent of the wages paid by the taxpayer during a taxable year to a qualifying employee with a disability, not to exceed $2,000 per qualified employee.

     To claim the credit, a taxpayer would be required to submit an application to the Director of the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development for certification that the employee has a disability for purposes of qualifying for the credit.  A copy of the certification would be included with the taxpayer’s tax return.  The contents of the certification would only state the fact the employee has a qualifying disability and not disclose any private or confidential health information.

     The bill requires the director to establish an application process and prescribe the form and manner through which a taxpayer may submit an application to obtain a certification from the director that an employee is a qualified employee with a disability for purposes of the tax credit.  The bill provides that applications would be deemed approved and written authorizations are deemed issued if the director fails to make a determination regarding within 90 calendar days of the date a complete application is received or if the director fails to issue a written authorization within five calendar days of the date a determination is made.

     The bill defines a “qualified employee with a disability” as a person with a disability recognized under the federal “Americans with Disabilities Act of 1990,” Pub.L.101-336 (42 U.S.C. s. 12102).  A qualified employee is also required to be employed by the taxpayer for at least 35 hours a week and paid wages at a rate of no less than $15 per hour.  A taxpayer would be unable to claim the credit for the wages paid to a person with a disability who works for the taxpayer as an independent contractor or on a consulting basis.