Hiring Tax Credit Formula

A business located in the City of Santa Clarita Enterprise Zone may reduce its State Income Tax by a percentage of the wages paid to one or more qualified employees. A business has the potential of earning $37,440 in tax credits per qualifying employee over a five-year period.

For Example:

If, on January 1, 2008, you hire a qualifying employee, and he/she works at your Enterprise Zone business as a full-time employee working 2080 hours, at $8.00 per hour*, the hiring tax credit would be calculated for five years as follows:

YEAR ONE CREDIT
$12.00 X 2080 HOURS=$24,960 X 50% = $12,480

YEAR TWO CREDIT
$12.00 X 2080 HOURS=$24,960 X 40% = $9,984

YEAR THREE CREDIT
$12.00 X 2080 HOURS=$24,960 X 30% = $7,488

YEAR FOUR CREDIT
$12.00 X 2080 HOURS=$24,960 X 20% = $4,992

YEAR FIVE CREDIT
$12.00 X 2080 HOURS=$24,960 X 10% =$2,496

TOTAL VALUE OF HIRING CREDIT = $37,440

* $12.00 IS THE CREDIT CAP VALUE (150% X CURRENT MINIMUM WAGE, $8.00).
A BUSINESS CAN PAY MORE OR LESS THAN THE CAP, BUT ONLY RECEIVE THE CREDIT FOR THE ACTUAL WAGES PAID TO A MAXIMUM OF $12.00 PER HOUR.