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State of California Franchise Tax Board

New Employment Credit - Annual Certification of Employment

The New Employment Credit (NEC) is a new tax credit available to businesses that hire qualified full-time employees on or after January 1, 2014. Some of the requirements to claim the credit include:

  • The qualified full-time employee works in the Designated Geographic Area.
  • The qualified employer obtains a credit reservation from us for each qualified full-time employee (announced in Tax News February 2014).
  • Another provision of the statute requires a qualified employer to complete an annual certification of employment with respect to each qualified full-time employee hired in the previous taxable year.

Other requirements must also be met. You can learn more about this credit on our NEC webpage.

To assist taxpayers in meeting the requirements for the NEC, we launched the Annual Certification of Employment online system in mid March. Employers will use this system to annually certify each qualified employee. The annual certification of employment is due on or before the 15th day of the 3rd month of the current taxable year for qualified full-time employees hired in the previous taxable year. Taxpayers with a taxable year on a calendar-year basis that hire qualified full-time employees during 2014 will complete the first annual certification of employment on or before March 15, 2015. However, for taxpayers with a taxable year on a fiscal-year basis, the annual certification may be due as soon as April 15, 2014. The following table illustrates the applicable due date based on your taxable year end date.

Table: Annual certification of employment due dates for taxable years ending in 2014

Taxable Year End Date Due Date*

January 31, 2014

April 15, 2014

February 28, 2014

May 15, 2014

March 31, 2014

June 15, 2014

April 30, 2014

July 15, 2014

May 31, 2014

August 15, 2014

June 30, 2014

September 15, 2014

July 31, 2014

October 15, 2014

August 31, 2014

November 15, 2014

September 30, 2014

December 15, 2014

October 31, 2014

January 15, 2015

November 30, 2014

February 15, 2015

December 31, 2014

March 15, 2015

*If the 15th of the month falls on a weekend or holiday, the due date is the next business day.

Back to April 2014 Tax News

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