New Jersey Assembly Bill A118

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Provides credits under corporation business tax and gross income tax for qualified wages of certain disabled veterans.

Impact

The impact of A118 is focused on increasing employment opportunities for disabled veterans in New Jersey. By granting tax credits, the bill not only incentivizes hiring but also aims to improve the financial circumstances of veterans seeking work. Employers can claim the credit for wages paid to qualified disabled veterans from January 1, 2017, to January 1, 2020, provided these veterans are employed for no less than 185 business days during the taxable period. This reflects a significant investment in supporting the veteran community and promoting inclusivity in the workforce.

Summary

Assembly Bill A118 aims to provide financial incentives for businesses in New Jersey to employ qualified disabled veterans by offering tax credits. Specifically, the bill establishes a corporation business tax and gross income tax credit equal to 15% of the wages paid to these veterans, with a maximum of $1,800 per veteran per taxable year. This initiative is designed to encourage employers to hire veterans who have been honorably discharged and have a service-connected disability rating of 30% or greater, thus addressing unemployment issues among this demographic.

Contention

While the bill promotes important access to employment for veterans, it also includes provisions to prevent potential abuse of the credit system. For instance, the tax credit cannot be claimed if the wages paid to the veteran are already considered in another state tax credit or if it was found that employing veterans displaces current employees to exploit the credit. There are concerns that such stipulations may lead to enforcement challenges and could impact the willingness of businesses to participate in the program, as the penalties for non-compliance are substantial.

Provisions

Notably, the bill includes specific regulations on the claim process and allows for credits to be transferred between taxpayers, which could facilitate broader participation. This flexibility might enable businesses who do not have a direct tax liability to benefit from the credits indirectly. Overall, A118 is positioned as a positive step toward integrating veterans more fully into the labor market, though it requires careful implementation and monitoring to ensure its objectives are achieved without unintended consequences.