2021 California Code
Revenue and Taxation Code - RTC
DIVISION 2 - OTHER TAXES
PART 10 - PERSONAL INCOME TAX
CHAPTER 2 - Imposition of Tax
Section 17053.80.

(a) (1) For each taxable year beginning on or after January 1, 2022, and before January 1, 2027, there shall be allowed to a qualified taxpayer that employs an eligible individual a credit against the “net tax,” as defined in Section 17039, an amount as determined pursuant to paragraph (2), not to exceed thirty thousand dollars ($30,000) per taxpayer per taxable year.

(2) A qualified taxpayer shall be allowed the credit pursuant to this section in the following amounts per taxable year:

(A) Two thousand five hundred dollars ($2,500) for each eligible individual that works at least 500 hours, but fewer than 1,000 hours, for the eligible employer during the taxable year in which the credit is claimed.

(B) Five thousand dollars ($5,000) for each eligible individual that works at least 1,000 hours, but fewer than 1,500 hours, for the eligible employer during the taxable year in which the credit is claimed.

(C) Seven thousand five hundred dollars ($7,500) for each eligible individual that works at least 1,500 hours, but fewer than 2,000 hours, for the eligible employer during the taxable year in which the credit is claimed.

(D) Ten thousand dollars ($10,000) for each eligible individual that works at least 2,000 hours for the eligible employer during the taxable year in which the credit is claimed.

(b) For purposes of this section:

(1) “Continuum of care” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations.

(2) “Coordinated entry system” means a centralized or coordinated assessment system developed pursuant to Section 578.7 of Title 24 of the Code of Federal Regulations, designed to coordinate homelessness program participant intake, assessment, and provision of referrals.

(3) “Eligible employer” means a taxpayer that meets all of the following requirements:

(A) Pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.

(B) Pays at least 120 percent of minimum wage.

(C) Provides to the Franchise Tax Board, upon request, a copy of the certification received for each eligible individual for each tax year that the credit is claimed for that eligible individual by that eligible employer.

(4) “Eligible individual” means a person who meets both of the following criteria:

(A) The person is homeless on the date of the hire or anytime during the 180-day period immediately before the hire, or someone who is receiving supportive services from a homeless services provider as designated by a local continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System.

(B) The person has been issued a certification pursuant to paragraph (2) of subdivision (c), and that certification has not expired.

(5) “Homeless Management Information System” has the same meaning as in Section 578.3 of Title 24 of the Code of Federal Regulations. “Homeless Management Information System” includes the use of a comparable database by a victim services provider or legal services provider that is permitted by the federal government under Part 576 (commencing with Section 576.1) of Title 24 of the Code of Federal Regulations.

(6) “Person is homeless” means the same as “homeless” as defined in Section 578.3 of Title 24 of the Code of Federal Regulations.

(7) “Minimum wage” means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.

(8) “Qualified taxpayer” means an eligible employer that pays wages subject to withholding under Division 6 (commencing with Section 13000) of the Unemployment Insurance Code to an eligible individual.

(c) (1) A credit shall not be allowed under this section unless the eligible employer submits to the Franchise Tax Board, upon request, a certification issued by a continuum of care, or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, or other program as specified by the Franchise Tax Board.

(2) A continuum of care or a community-based service provider that is connected to the local coordinated entry system or to a local Homeless Management Information System, shall issue certifications for eligible individuals.

(3) The certification pursuant to paragraph (2) shall be issued in a form and manner prescribed by Franchise Tax Board.

(4) A certification issued pursuant to this subdivision shall expire one year after issuance.

(d) (1) The total aggregate amount of the credit that may be allocated by credit reservations per calendar year to all qualified taxpayers pursuant to this section and Section 23629 shall not exceed thirty million dollars ($30,000,000), plus the unallocated credit amount, if any, from the preceding calendar year.

(2) A qualified taxpayer shall claim the credit on a timely filed original return of the qualified taxpayer and only with respect to an eligible individual for whom the qualified taxpayer has received a credit reservation.

(3) (A) To be eligible for the credit allowed by this section with respect to an eligible individual, a qualified taxpayer shall, upon hiring an eligible individual, request a credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Department’s new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board.

(B) To obtain a credit reservation with respect to an eligible individual, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, how many hours the eligible individual is expected to work for the next 12 months, and the start date of employment.

(4) The Franchise Tax Board shall do both of the following:

(A) Approve a tentative credit reservation with respect to an eligible individual hired during a taxable year.

(B) Subject to the annual cap established as provided in paragraph (1), allocate an aggregate amount of credits under this section and Section 23629, and allocate any carryover of unallocated credits from prior years.

(e) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding two years if necessary, until the credit is exhausted.

(f) If the credit allowed by this section is claimed by the qualified taxpayer, a deduction otherwise allowed under this part for any amount of wages paid or incurred by the qualified taxpayer as a trade or business expense to an eligible individual shall be reduced by the amount of the credit allowed by this section.

(g) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(h)  This section shall remain in effect only until December 1, 2027, and as of that date is repealed.

(Amended by Stats. 2021, Ch. 256, Sec. 13. (AB 176) Effective September 23, 2021. Repealed as of December 1, 2027, by its own provisions.)