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State of California Franchise Tax Board

Tax News
Governor Brown Announces Pilot Areas for the New Employment Credit

The New Employment Credit (NEC) is a hiring credit for businesses that operate in areas of the state with the highest unemployment and poverty. These areas are known as the Designated Geographic Area (DGA). Pilot areas are areas within the DGA. Businesses operating in pilot areas have the added benefit of lower qualified wages for purposes of computing the NEC. Qualified wages are those above 150 percent of the current minimum wage, which is presently $12 per hour. In pilot areas, qualified wages are those above $10 per hour.

Governor Brown recently announced the designation of three pilot areas. The Governor’s Office of Business and Economic Development (GO-Biz) designated the pilot areas of Fresno, Merced, and Riverside. These pilot areas are in effect until December 31, 2017, and may be extended by GO-Biz for an additional three-calendar years.

You can see an interactive map showing the DGA as well as the pilot areas here. The description of the three pilot areas is found in the "About/Help” page of the DGA map. For more information about the NEC and the Pilot Areas, go to our FAQs.

Back to May 2014 Tax News

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