HP0696, LD 1001, item 1, An Act To Enact a New Hire Tax Credit and To Create Initiatives To Help Families Move from Assistance to Employment

An Act To Enact a New Hire Tax Credit and To Create Initiatives To Help Families Move from Assistance to Employment

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 36 MRSA §5122, sub-§1, ¶JJ is enacted to read:

JJ. An amount equal to the wages deducted in determining federal adjusted gross income that is included in the base for the new hire tax credit under section 5219-NN.

Sec. 2. 36 MRSA §5200-A, sub-§1, ¶CC is enacted to read:

CC. An amount equal to the wages deducted in determining federal taxable income that is included in the base for the new hire tax credit under section 5219-NN.

Sec. 3. 36 MRSA §5219-NN is enacted to read:

§ 5219-NN. New hire tax credit

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Employing unit" has the same meaning as in Title 26, section 1043, subsection 10.

B. "Qualifying person" means a person who, immediately prior to employment with an employing unit, was a recipient of benefits under the ASPIRE-TANF program under Title 22, chapter 1053-B and who is employed for at least 20 hours per week on average by the employing unit.

2. Amount of credit. For tax years beginning on or after January 1, 2016, a taxpayer that is an employing unit is allowed a tax credit against the tax otherwise due under this Part equal to 50% of the gross wages paid during the taxable year to a qualifying person during the first 12 continuous months of employment by the taxpayer.

3. Limitation. The tax credit under this section may not exceed $10,000 for the taxable year and may not reduce the tax otherwise due under this Part to less than zero. A taxpayer entitled to a credit under this section for any taxable year may carry over and apply to the tax liability for any one or more of the succeeding 2 tax years the portion, as reduced from year to year, of any unused credit amount.

Sec. 4. Department of Health and Human Services to review benefits and assistance laws. The Department of Health and Human Services shall review laws concerning benefits and assistance to low-income recipients to identify any provisions in statute, rules or policy that penalize or create a disincentive to work and make needed recommendations to eliminate any disincentives and propose new policies that support and promote stable and lasting employment among the low-income recipients of state benefits and assistance. In conducting the review under this section, the department shall review transitional assistance and benefits and existing or potential barriers to achieving independence from public assistance and develop proposed changes to current statute, rules or policy to ease or remove these barriers. The department shall also develop recommended legislation to adjust the level of benefits based upon earned income for low-income recipients of state assistance who are employed by a taxpayer who receives a new hire tax credit under the Maine Revised Statutes, Title 36, section 5219-NN. By December 2, 2015, the department shall submit its report and recommended legislation to the Joint Standing Committee on Health and Human Services. The Joint Standing Committee on Health and Human Services may report out legislation based upon the report to the Second Regular Session of the 127th Legislature.

Sec. 5. Application. Those sections of this Act that amend the Maine Revised Statutes, Title 36, section 5122 and section 5200-A apply to income tax years beginning on or after January 1, 2016.

SUMMARY

This bill creates a new hire tax credit for an employer in the amount of 50% of the wages of an employee who was a recipient of benefits under the Temporary Assistance for Needy Families program and who is employed at least 20 hours per week on average by the employer. This bill also directs the Department of Health and Human Services to develop recommended legislation to adjust the level of assistance under state benefits programs based upon earned income for low-income recipients of state assistance who are employed by an employer who receives a new hire tax credit and to recommend other measures in statute, rule and policy that will enable low-income recipients of state assistance to obtain stable and lasting employment.

HP0696 LD 1001	Session - 127th Maine Legislature		LR 208 Item 1
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