Summary:

 House Bill 368 (HB 368) amends the definition of “threshold job” under the High-Wage Jobs Tax Credit to adjust eligibility criteria for the credit. The bill modifies the calculation of the employment period required to qualify as a threshold job, aligning it with the first 52 weeks of employment rather than a calendar year. The change applies to tax credit applications submitted on or after the bill’s effective date.
 

Legislation Overview:

 House Bill 368 (HB 368) revises the High-Wage Jobs Tax Credit by modifying the definition of “threshold job.” The bill specifies that a threshold job must be occupied for at least 44 weeks within the first 52 weeks of employment, rather than within a calendar year. This change ensures that eligibility for the tax credit is based on an employee’s tenure from their start date rather than the constraints of a specific tax year.

The High-Wage Jobs Tax Credit allows eligible employers to claim a credit equal to 8.5% of wages paid to an employee in a high-wage job, with a maximum credit of $12,750 per job per qualifying period. The bill does not alter the credit amount but modifies how long a job must be retained before qualifying for the incentive. Employers must continue to apply for the credit through the Taxation and Revenue Department, which will determine eligibility under the revised criteria.

Implications

HB 368 may expand eligibility for the High-Wage Jobs Tax Credit by adjusting the time-based qualification standard. Employers that previously faced restrictions due to a calendar-year constraint may now qualify for credits if they maintain jobs for the required 44 weeks within the first 52 weeks of employment. The fiscal impact on the state will depend on whether this change leads to an increase in the number of eligible tax credit claims. Administrative adjustments by the Taxation and Revenue Department will be necessary to process applications under the revised standard. 

Current Law:

 Under current law, a threshold job must be occupied for at least 44 weeks within a calendar year to qualify for the High-Wage Jobs Tax Credit. The existing statute does not define the qualifying period in relation to an employee’s first 52 weeks of employment, which may have limited eligibility for the credit in cases where employment began mid-year.