Homeless Hiring Tax Credit
AB 150 signed by the Governor on July 16, 2021, established a Homeless Hiring Tax Credit. The credit is available for taxable years beginning January 1, 2022, through December 31, 2026. Employers may receive $2,500 to $10,000 in tax credit per eligible employee based on hours worked in the taxable year. Employers may claim up to $30,000 of credit per taxable year. A total of $30 million is available annually 2022 through 2026. The credit may only be claimed on a timely filed original return.
Eligible Employee Requirements
An eligible employee must meet the following requirements:
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Be currently/recently homeless (within 180 days of hire) or be receiving services from a homeless services provider, and
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Receive a certificate through a certifying organization. The certificate expires 1 year after issuance., Certifying organizations include Continuum of Care (CoC) programs and community-based service providers. A certifying organization will confirm employer and employee eligibility and provide the certification for the employer. Only organizations that are connected to the local coordinated entry systems or to a local homeless management information system may certify an eligible individual. A list of qualifying organizations is available on the FTB web site: https://bcsh.ca.gov/calich/documents/coc_poc.pdf
Employer Eligibility Requirements
To be eligible:
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Employer may hire up to 3 eligible individuals in a single tax year
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Obtain a certificate for each eligible employee from a certifying organization.
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Pay wages equal to or greater than 120% of the state minimum wage. Effective 1/1/23, the same rate applies to all employees. Although some local jurisdictions have higher minimum wages, for purposes of this credit, the state rate is used.
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Make a tentative credit reservation within 30 days of completing the New Hire reporting requirement with the Employment Development Department. The following information will be required for each potential reservation:
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Name
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SSN
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Estimated hours expected to work during the taxable year
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Tentative credit reservation must be made with the FTB to claim the credit. See Homeless Hiring Tax Credit | FTB.ca.gov for information on how to make a reservation.
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A single employee may generate a credit of $2,500 to $10,000
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3 employees (the max) can generate $7,500 to $30,000 in annual credit.
Form to Use
Form FTB 3831, Homeless Hiring Tax Credit, is used to compute the credit.
Credit Amount
Credit Carryover
If the available credit exceeds the current year tax liability or is limited by tentative minimum tax, the unused credit may be carried over for three years or until the credit is exhausted, whichever occurs first.