Tax Credits and Incentives
Our firm specializes in assisting businesses effectively avail of the California New Employment Credit (NEC). We also assist clients in navigating complex tax rules to properly qualify for and claim eligible Employee Retention Credits.
New Employment Credit (NEC)
This credit is for employers that:
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Hire qualified full-time employees
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Receive a reservation for that employee
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Pay wages for work performed by that employee in a designated geographic area (DGA)
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Report the credit on a timely filed (including extensions) original return
About the California New Employment Credit
The NEC passed in 2013 as part of a compromise legislation that eliminated the California Enterprise Zone (“CA EZ”) state income tax credit. As part of this legislation the EZ was eliminated as of Dec 2013, individuals tax rates went up (“temporary”), and NOLs were temporarily suspended. The NEC program was extended in 2018 until December 31, 2025.
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It has a strict set of requirements based on
- Geography
- Industry
- Specific Point of Hiring Categories
- Employee Growth
- Full Time Employees
- Min Wage Requirements
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Despite being scored as a replacement of the EZ, the authors created multiple barriers for businesses to claim the credit making the requirements very difficult:
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For the 2014 – 2018 tax years only 303 companies utilized the NEC generating a total of $8.7M in credits. One qualified individual will generate significant income tax credit for the Employer (the credit is a 5-year credit).
Where PTAG works for YOU
We are former Big 4 CPAs, attorneys & government officials with a broad range of knowledge in the incentives field. We help implement and execute the NEC project. We will assist YOU with proven procedures to document qualifying categories, quantifying the tax credit, and managing the NEC project implementation within the Company.