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 Bill Text - AB-2205 Personal Income Tax Law: Corporation Tax Law: New Employment Credit. 

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 |Add To My Favorites |Track Bill | Version: 03/18/26 - Amended Assembly
 02/19/26 - Introduced

 AB-2205 Personal Income Tax Law: Corporation Tax Law: New Employment Credit. (2025-2026)

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 Date Published: 03/18/2026 09:00 PM

AB2205:v98#DOCUMENTBill Start

 Amended
 IN 
 Assembly
 March 18, 2026

 CALIFORNIA LEGISLATURE—
 2025–2026 REGULAR SESSION

 Assembly Bill

No. 2205

Introduced by Assembly Member Quirk-Silva

February 19, 2026

 An act to amend Sections 17053.73 and 23626 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. 

LEGISLATIVE COUNSEL'S DIGEST

AB 2205, as amended, Quirk-Silva.
 Personal Income Tax Law: Corporation Tax Law: New Employment Credit. 

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2014, and before January 1, 2026, a credit for hiring qualified full-time employees, as defined, within a designated census tract or economic development area in an amount equal to 35% of the qualified wages, defined in part as those wages that exceed 150% of minimum wage but do not exceed 350% of minimum wage, paid to those employees multiplied by the applicable percentage for that taxable year. Existing law exempts certain taxpayers from the above-described census tract or economic development area requirement, as specified, and disallows the above-described credit for specified businesses. Existing law repeals the above-described provisions on December 1, 2029.

This bill would extend the operative date for the above-described tax credits through taxable years beginning before January 1, 2031. The bill would extend the above-described repeal date to December 1, 2034.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill also would include additional information required for any bill authorizing a new tax expenditure.

This bill would take effect immediately as a tax levy.

Digest Key

 Vote:
 MAJORITY 
 Appropriation:
 NO 
 Fiscal Committee:
 YES 
 Local Program:
 NO 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 17053.73 of the Revenue and Taxation Code is amended to read:

17053.73.

 (a) (1) For each taxable year beginning on or after January 1, 2014, and before January 1, 2031, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a designated census tract or economic development area, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the “net tax,” as defined in Section 17039, in an amount calculated under this section.

(2) For each taxable year beginning on or after January 1, 2023, and before January 1, 2031, the designated census tract or economic
 development area requirements shall not apply to a qualified taxpayer described in clause (ii), (iii), (iv), or (v) of subparagraph (A) of paragraph (14) of subdivision (b).

(3) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year.

(4) (A) If a qualified taxpayer relocates to a designated census tract or economic development area, the qualified taxpayer shall be allowed a credit with respect to qualified wages for each qualified full-time employee employed within the new location only if the qualified taxpayer provides each employee at the previous location or locations a written offer of employment at the new
 location in the designated census tract or economic development area with comparable compensation.

(B) For purposes of this paragraph, “relocates to a designated census tract or economic development area” means an increase in the number of qualified full-time employees, employed by a qualified taxpayer, within a designated census tract or tracts or economic development areas within a 12-month period in which there is a decrease in the numb