New Jersey Assembly Bill A2039

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Provides tax credits to small employers that rehire employees laid off for reasons of economy due to COVID-19 public health emergency.

Impact

The legislation is particularly directed at small employers, defined as those with 100 or fewer employees and categorized under specific industry codes related to retail, healthcare, and other services. This targeted support aims to mitigate the adverse economic effects of the pandemic on small businesses, enabling them to stabilize their workforce and potentially improve job security for many individuals affected by layoffs. It takes effect immediately and is applicable to tax years starting from 2020 through 2022, or any subsequent year in which the public health emergency continues.

Summary

Assembly Bill A2039, introduced in the 220th Legislature of New Jersey, aims to provide financial assistance to small employers who rehire workers laid off due to economic reasons linked to the COVID-19 public health emergency. Specifically, the bill allows qualified small employers to claim a tax credit of $250 for each employee rehired or called back from layoff to a position previously held, which was vacated during the pandemic. This initiative is designed to incentivize employers to reinstate their workforce as the economy begins to recover from the impacts of COVID-19.

Contention

One notable point of contention surrounding A2039 is the limitation on the total credits that can be claimed. The credits cannot exceed 50% of a taxpayer's overall tax liability, which may raise concerns about the sufficiency of assistance for businesses struggling to recover. Additionally, the bill specifies that partnerships and S corporations will not be able to claim credits directly but can allocate credits based on their distributive share, which could complicate the benefit's accessibility for some business structures.