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State of California Franchise Tax Board

Tax News
New Employment Credit Begins

The New Employment Credit (NEC) is a new tax credit available to businesses that hire qualified employees on or after January 1, 2014.

One requirement is for the qualified employee to be working in a certain area of the state. This area is known as the Designated Geographic Area (DGA). You can use this mapping tool to see if a location is in the DGA.

Another requirement is for the employer, who is a qualified taxpayer, to get a credit reservation within 30 days of completing the EDD new hire reporting requirement for a qualified full time employee hired on or after January 1, 2014. We launched the New Employment Credit Reservation system at the beginning of January. Employers use this system to get a reservation for their new employee.

We listed other requirements for both the employer and the employee on our NEC webpage. Also, we included on the FAQs the link to the mapping tool and the link to the online reservation system. Additional information on the credit will be posted to this webpage as it is available.

Back to February 2014 Tax News

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