Small businesses could claim tax credits for retaining New Jersey workers

Eligible small businesses would be allowed up to $50,000 per tax year in credits against state business or personal income taxes. Businesses must be registered in New Jersey and have a location there or earn most of their income from activities there. They must have no more than 75 employees in any month of the covered tax period. Eligible workers must live in New Jersey. Workers must work at least 35 hours a week or a schedule generally accepted as full time, for at least 12 consecutive months. Only wages subject to New Jersey income tax would count. A business could claim the credit only once for each eligible worker.

The credit would equal eligible wages, up to the highest per-worker cap that applies. The $4,000 cap covers eligible veterans, people with disabilities, and people who earned an associate degree from a New Jersey county college within the last three years. The wage comparison uses the county where the employee mainly works. Eligible veterans must be citizens and New Jersey residents who left active military service under honorable conditions. The $5,000 cap requires pay of at least 125 percent of the county's median full-time wage, using the state's wage survey from the preceding calendar year.

Businesses could not claim these credits for wages also used to calculate another tax break or business aid covering the same period. These limits would apply to businesses claiming either type of credit. Business tax credits could not reduce taxes below the required minimum. Personal income tax credits could not reduce taxes below zero. Taxpayers would have to submit wage records required by the state. Unused credits could be used in the three tax years following the year they were issued, then would expire.