New Jersey Assembly Bill A5284

New Jersey 2022-2023 Regular Session

• Introduced: 3/9/23
• Refer: 3/9/23

Caption

Provides tax credits to small businesses to offset increases in unemployment insurance contributions.

Impact

The implications of A5284 are notable, particularly for small business owners facing increasing operational expenses. The tax credits are non-refundable but can be carried forward for up to seven years if they exceed tax liabilities in any given year. This flexibility allows businesses to manage their finances more effectively in the face of fluctuating employment markets and economic challenges. However, businesses that have obtained grants or subsidies to cover their unemployment contributions are not eligible for these tax credits, creating a potential point of contention regarding equitable access to benefits.

Summary

Assembly Bill A5284 aims to provide significant financial relief to small businesses in New Jersey by offering corporation business tax and gross income tax credits to help offset increases in unemployment insurance contributions. Specifically, the bill allows eligible small businesses to claim a tax credit equal to the difference between their actual unemployment insurance contributions and the amount they would have paid under historically lower rates outlined in state law. This credit is meant to support small businesses struggling with rising costs due to adjustments in unemployment insurance rates scheduled by state legislation.

Contention

Critics of the bill may argue that the restriction on combining these tax credits with other forms of financial relief could limit the intended benefits for many small businesses. Additionally, there is concern over whether the funding to support these tax credits will be sustainable in the long run, particularly in a dynamic economic environment. As New Jersey continues to encourage small business growth, lawmakers must balance the need for robust support measures with fiscal responsibility to avoid creating long-term deficits related to the tax credits provided through A5284.