419 Main St., #235
Huntington Beach, CA 92648
ph: 714.369.3739
fax: 714.969.1057
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Hiring Tax Credit
The most lucrative tax credit available through the program can be the Hiring Tax Credit.
This incentive allows an employer to take state income tax credits of $37,440 or more, per qualified employee, based on wages paid over a five year period.
In Example #1 below, you will see that an employee that starts off earning $9.00 per hour can generate a 5 year tax credit of $33,488.
In Example #2 to the right, you can see how different wage rates will generate significant annual tax credits.
Hiring Credit Example #2:
Below are a few calculations of the Hiring Credits one employee can earn, using various rates of pay:
| Hourly Pay / Salary | ||||||
| Year | Credit | $8/hr | $9/hr | $10/hr | $12/hr | $75,000/yr |
| 1 | 50% | $8,320 | $9,360 | $10,400 | $12,480 | $12,480 |
| 2 | 40% | $6,656 | $7,488 | $8,320 | $9,984 | $9,984 |
| 3 | 30% | $4,992 | $5,616 | $6,240 | $7,488 | $7,488 |
| 4 | 20% | $3,328 | $3,744 | $4,160 | $4,992 | $4,992 |
| 5 | 10% | $1,664 | $1,872 | $2,080 | $2,496 | $2,496 |
| Total | $24,960 | $28,080 | $31,200 | $37,440 | $37,440 | |
Hiring Credit Example #1: For this example, we'll assume that the employee's pay rate was $9.00 per hour when they started, and with raises, they increased their hourly pay rate to $15.00 by their fifth year. As you can see, a full time employee being paid $9.00 per hour can generate nearly $10,000 in tax savings in just their first year with the company! The employer can take credit based on:
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419 Main St., #235
Huntington Beach, CA 92648
ph: 714.369.3739
fax: 714.969.1057
info