LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 4120
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: JULY 29, 2025
SUMMARY
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Synopsis: |
Provides corporation business tax credits and gross income tax credits to businesses employing and retaining certain neurodiverse individuals. |
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Type of Impact: |
Annual State revenue loss. |
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Agencies Affected: |
Department of the Treasury; Department of Labor and Workforce Development; Department of Human Services. |
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Fiscal Impact |
FY 2027 & Thereafter |
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State Revenue Decrease |
Up to $10 million |
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· The Office of Legislative Services (OLS) concludes that the bill will result in an annual State revenue loss of up to $10 million associated with the provision of tax credits to the employers of neurodiverse individuals.
· The actual annual revenue loss that may result from the bill is indeterminate and could be less than the $10 million maximum, with revenue losses depending on the number of qualifying employers and employees, retention rates, and program utilization.
· The magnitude of the revenue loss cannot be precisely determined due to the undefined nature of eligibility criteria for neurodiverse individuals, which will be established through departmental guidelines and decisions made after enactment, and the inability to predict the extent to which employers will know that their employees qualify as neurodiverse.
BILL DESCRIPTION
The bill provides corporation business tax credits and gross income tax credits to taxpayers that employ certain neurodiverse individuals working in qualifying science, technology, engineering, math, or artificial intelligence fields. The credit amounts increase based on consecutive years of employment: $7,000 for the first year, $8,000 for the second consecutive year, and $9,000 for the third and subsequent consecutive years for full-time employees. Part-time employees generate credits of up to $4,500 per year.
The bill establishes a $10 million annual cap on total tax credits that may be approved by the Division of Vocational Rehabilitation Services in the Department of Labor and Workforce Development. The division, in consultation with the Division of Developmental Disabilities in the Department of Human Services, will issue guidelines defining eligibility criteria for neurodiverse individuals. The Division of Vocational Rehabilitation Services will also determine qualifying roles related to STEM and artificial intelligence fields.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that this bill will result in an annual State revenue loss of up to $10 million, as established by the statutory cap in the bill, associated with the provision of tax credits to the employers of neurodiverse individuals. The actual revenue loss in any given year is indeterminate and could be lower than the maximum amount.
The bill’s fiscal impact is subject to uncertainty due to several undefined factors that will be determined through administrative action after enactment. Most critically, the bill does not define who qualifies as neurodiverse, leaving this determination to guidelines that will be jointly issued by the Division of Vocational Rehabilitation Services and the Division of Developmental Disabilities. Additionally, the bill does not specify the criteria for determining qualifying roles in science, technology, engineering, math, or artificial intelligence fields, leaving this to the Division of Vocational Rehabilitation Service’s discretion. Together, these factors prevent the OLS from quantifying the fiscal impact of the bill.
The actual annual revenue loss will depend on several factors, including: the number of employers who apply for the tax credit program; the number of individuals who meet to-be-established criteria for neurodiversity; the number of positions that qualify as STEM or AI roles; employee retention rates across consecutive tax years; the mix of full-time versus part-time qualifying employees; and overall program awareness and participation among eligible employers.
Given the escalating credit structure that rewards multi-year employee retention, actual program costs could vary significantly based on employment patterns. The program could experience lower initial costs if employers primarily hire new qualifying employees (receiving $7,000 credits), or higher costs if employers retain employees for multiple consecutive years (receiving up to $9,000 credits).
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Section: |
Revenue, Finance, and Appropriations |
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Analyst: |
Associate Fiscal Analyst |
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Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).