New Jersey S 227: Allows corporation business tax and gross income tax credits to businesses employing qualified ex-offenders.

Bill Text

S227 

SENATE, No. 227 

STATE OF NEW JERSEY

222nd LEGISLATURE

� 

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Senator SHIRLEY K. TURNER

District 15 (Hunterdon and Mercer)

Senator JOSEPH P. CRYAN

District 20 (Union)

SYNOPSIS

���� Allows corporation business tax and gross income tax 
credits to businesses employing qualified ex-offenders.

CURRENT VERSION OF TEXT 

���� Introduced Pending Technical Review by Legislative 
Counsel.

�� 

An Act allowing credits against the corporation 
business tax and the gross income tax to businesses employing certain 
ex-offenders and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 
54A of the New Jersey Statutes.

���� Be It 
Enacted by the Senate and General Assembly of 
the State of New Jersey:

���� 1.��� a.� A taxpayer shall be 
allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, 
c.162 (C.54:10A-5) in an amount equal to 15 percent of the wages paid by the 
taxpayer during the privilege period for the employment of a qualified ex-offender, 
but not to exceed $900 for each qualified ex-offender for the privilege period.

���� b.��� As used in this section:

���� "Qualified 
ex-offender" means an individual who:

���� (1)�� has been convicted of a 
crime of the first, second, third or fourth degree under the laws of this 
State; and

���� (2)�� has been hired within 
one year of the date of conviction or release from incarceration.

���� c.���� The amount of the 
credit applied under this section against the tax imposed pursuant to section 5 
of P.L.1945, c.162 (C.54:10A-5), for a privilege period, when taken together 
with any other credits allowed against the tax imposed pursuant to section 5 of 
P.L.1945, c.162 (C.54:10A-5), shall not exceed 50 percent of the tax liability 
otherwise due and shall not reduce the tax liability to an amount less than the 
statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 
(C.54:10A-1 et seq.).� The priority in which credits allowed pursuant to this 
section and any other credits shall be taken shall be determined by the 
Director of the Division of Taxation.� The amount of the credit otherwise 
allowable under this section which cannot be applied for the privilege period 
due to the limitations of this subsection or under other provisions of 
P.L.1945, c.162 may be carried over, if necessary, to the seven privilege 
periods following the privilege period for which the credit was allowed.

���� 2.��� a.� A taxpayer shall be 
allowed a credit against the tax otherwise due for the taxable year under the 
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an 
amount equal to 15 percent of the wages paid by the taxpayer during the taxable 
year for the employment of a qualified ex-offender during the taxable year, but 
not to exceed $900 for each qualified ex-offender for the taxable year.

���� b.��� As used in this section:

���� "Qualified 
ex-offender" means an individual who:

���� (1)�� has been convicted of a 
crime of the first, second, third or fourth degree under the laws of this 
State; and

���� (2)�� has been hired within 
one year of the date of conviction or release from incarceration.

���� c.���� The amount of the 
credit allowed pursuant to this section shall be applied against the tax 
otherwise due under N.J.S.54A:1-1 et seq. after all other credits and payments. 
If the credit exceeds the amount of tax otherwise due, that amount of excess 
shall be an overpayment for the purposes of N.J.S.54A:9-7.

���� d.��� A partnership shall not 
be allowed a credit under this section directly, but the amount of credit of a 
taxpayer in respect of a distributive share of partnership income under the 
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be 
determined by allocating to the taxpayer that proportion of the credit acquired 
by the partnership that is equal to the taxpayer's share, whether or not 
distributed, of the total distributive income or gain of the partnership for 
its taxable year ending within or with the taxpayer's taxable year.

���� 3.��� This act shall take 
effect immediately and shall apply to wages paid in privilege periods and 
taxable years beginning after enactment.

STATEMENT

���� This bill allows corporation 
business tax and gross income tax credits to businesses that employ qualified 
ex-offenders.� The amount of each credit would be equal to 15 percent of the 
wages paid to the ex-offender with a maximum of $900 per ex-offender.

���� A qualified ex-offender is 
defined in the bill as a person who: (1) has been convicted of a crime of the 
first, second, third or fourth degree in this State; and (2) has been hired 
within one year of the date of conviction or release from incarceration.

���� These State tax credits are 
modeled on the federal Work Opportunity Tax Credit (WOTC), which encourages 
employers to hire targeted groups of employees, including ex-felons.� Under the 
federal WO