The New Employment Credit is a California state income tax credit currently available through 2025. To qualify, businesses must hire at least one eligible full-time employee in a “designated geographic area” - a region identified by the state as having high unemployment or poverty. Employers must also register a tentative credit reservation for each qualifying hire.
The New Employment Credit (NEC) is a California tax credit that encourages hiring and employment in the state. The NEC was recently extended by Senate Bill 855. The NEC is available for taxable years beginning on or after January 1, 2014, and before January 1, 2026. The NEC is available to businesses located in designated areas in the state that hire qualified full-time employees, receive a tentative credit reservation for that employee, and meet other requirements.
There are a number of elements to this credit. It's important that you understand the requirements to generate this credit. You can also refer to California Revenue Taxation Code (R&TC) Sections 17053.73 and 23626 for the law and all requirements.
If you have any questions, you can reach out by email at GEDI@ftb.ca.gov or by phone at (916) 845-3464.