43-1087. Credit for employment of temporary assistance for needy families recipients

A. A credit is allowed against the taxes imposed by this title for net increases in qualified employment by the taxpayer of recipients of temporary assistance for needy families as defined in section 46-101 who are residents of this state. The amount of the credit is equal to the sum of the following:

1. One-fourth of the taxable wages paid to each employee in qualified employment positions, not to exceed five hundred dollars per qualified employment position, in the first year or partial year of employment. Wages that were subsidized as provided by section 46-299 shall not be included.

2. One-third of the taxable wages paid to each employee in qualified employment positions, not to exceed one thousand dollars per qualified employment position, in the second year of continuous employment. Wages that were subsidized as provided by section 46-299 shall not be included.

3. One-half of the taxable wages paid to each employee in qualified employment positions, not to exceed one thousand five hundred dollars per qualified employment position, in the third year of continuous employment. Wages that were subsidized as provided by section 46-299 shall not be included.

B. The credit allowed in this section is in lieu of any wage expense deduction taken for state tax purposes.

C. To qualify for a credit under this section:

1. All of the employees with respect to whom a credit is claimed must reside in this state and must be recipients of temporary assistance for needy families as defined in section 46-101 at the time the employee is hired.

2. A qualified employment position must meet all of the following requirements:

(a) The position must be classified as full-time employment.

(b) The employment must include health insurance coverage for the employee if the employer offers this coverage for employees who are not recipients of temporary assistance for needy families.

(c) The employer must pay compensation at least equal to the minimum wage or a wage comparable to that paid to employees who are not receiving temporary assistance for needy families based on the employee's training, skills and job classification.

(d) The employee must have been employed for at least ninety days during the first taxable year. An employee who is hired during the last ninety days of the taxable year shall be considered a new employee during the next taxable year. Periods for which the employee's wages were subsidized as provided by section 46-299 shall not be included as periods of employment.

(e) The employee was not employed by the taxpayer within twelve months before the current date of hire.

(f) The employee position is not eligible for any other employment credit pursuant to this title based on wages paid.

D. The net increase in the number of qualified employment positions shall be determined by comparing the average number of qualified employment positions during the taxable year with the immediately preceding taxable year based on the taxpayer s report to the department of economic security for unemployment purposes.

E. If the allowable tax credit exceeds the income taxes otherwise due on the claimant s income, the amount of the claim not used as an offset against income taxes may be carried forward as a tax credit against subsequent years income tax liability for the period, not to exceed five consecutive taxable years.

F. Co-owners of a business, including partners in a partnership and shareholders of an S corporation as defined in section 1361 of the internal revenue code, may claim only the pro rata share of the credit allowed under this section based on the ownership interest. The total of the credits allowed all the owners of the business may not exceed the amount that would have been allowed for a sole owner of the business.

G. The department may adopt rules necessary for the administration of this section.