Ask The Edd Lawyer- Explain California’S New Employment Tax Credit And The Annual Certification Of Employment

By Robert S. Schriebman

On April 1, 2014, the California Franchise Tax Board issued some tax news concerning the “new employment credit” (NEC). This credit may save you, as an employer, a considerable sum of money on your 2014 income taxes. In the interest of getting matters absolutely accurate I have repeated verbatim the official FTB statement on the new employment credit:

New Employment Credit – Annual Certification of Employment

The New Employment Credit (NEC) is a new tax credit available to businesses that hire qualified full-time employees on or after January 1, 2014. Some of the requirements to claim the credit include:

• The qualified full-time employee works in the Designated Geographic Area
• The qualified employer obtains a credit reservation from us for each qualified full-time employee (announced in Tax News February 2014)
• Another provision of the statute requires a qualified employer to complete an annual certification of employment with respect to each qualified full-time employee hired in the previous taxable year.

Other requirements must also be met. You can learn more about this credit on our NEC webpage.

To assist taxpayers in meeting the requirements for the NEC, we launched the Annual Certification of Employment online system in mid March. Employers will use this system to annually certify each qualified employee. The annual certification of employment is due on or before the 15th day of the 3rd month of the current taxable year for qualified full-time employees hired in the previous taxable year. Taxpayers with a taxable year on a calendar-year basis that hire qualified full-time employees during 2014 will complete the first annual certification of employment on or before March 15, 2015. However, for taxpayers with a taxable year on a fiscal-year basis, the annual certification may be due as soon as April 15, 2014. The following table illustrates the applicable due date based on your taxable year end date.

Table: Annual certification of employment due dates for taxable years ending in 2014

Taxable Year End Date	Due Date *
January 31, 2014	April 15, 2014
February 28, 2014	May 15, 2014
March 31, 2014	June 15, 2014
April 30, 2014	July 15, 2014
May 31, 2014	August 15, 2014
June 30, 2014	September 15, 2014
July 31, 2014	October 15, 2014
August 31, 2014	November 15, 2014
September 30, 2014	December 15, 2014
October 31, 2014	January 15, 2015
November 30, 2014	February 15, 2015
December 31, 2014	March 15, 2015

* If the 15 th of the month falls on a weekend or holiday, the due date is the next business day.

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An EDD lawyer, Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States.

As a trusted EDD attorney, has successfully dedicated more than 30 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.

Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House and the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.