Personal Income Tax Law: Corporation Tax Law: New Employment Credit.

Labor Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Quirk-Silva
Last action: 2026-04-13
Official status: In committee: Set, second hearing. Referred to REV. & TAX. suspense file.
Effective date: Not listed

Plain English Breakdown

The bill summary does not provide specific details on which businesses are exempt from the New Employment Credit.

Extension of New Employment Credit

AB-2205 extends the existing New Employment Credit, which provides businesses with a tax reduction for hiring full-time employees in designated areas, until December 1, 2034.

What This Bill Does

Extends the existing New Employment Credit through taxable years beginning before January 1, 2031.
Increases the end date of the credit from December 1, 2029 to December 1, 2034.

Who It Names or Affects

Businesses that hire full-time employees in designated census tracts or economic development areas.

Terms To Know

tax credit: A reduction in the amount of tax a business has to pay.
qualified full-time employees: Employees who work at least 30 hours per week and meet other requirements set by law, earning wages between 150% and 350% of minimum wage.

Limits and Unknowns

The bill does not specify which businesses are exempt from the credit.
It is unclear how many new jobs will be created as a result of this extension.

Bill History

2026-04-13 California Legislative Information
In committee: Set, second hearing. Referred to REV. & TAX. suspense file.
2026-04-06 California Legislative Information
In committee: Set, first hearing. Hearing canceled at the request of author.
2026-03-19 California Legislative Information
Re-referred to Com. on REV. & TAX.
2026-03-18 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
2026-03-09 California Legislative Information
Referred to Com. on REV. & TAX.
2026-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2026-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

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.

Current Bill Text

Read the full stored bill text

Download Bill PDF