Read the full stored bill text
A1793
ASSEMBLY, No. 1793
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman ANTHONY S. VERRELLI
District 15 (Hunterdon and Mercer)
Co-Sponsored by:
Assemblyman Freiman
SYNOPSIS
���� Establishes "Recovery Tax Credit Program";
incentivizes hiring and continued employment of certain individuals in recovery
from substance use disorder.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
incentivizing the hiring and continued employment of
certain individuals in recovery from a substance use disorder and supplementing
various parts of the statutory law.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� As used in P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill):
���� "Certified employer"
means an employer in this State that has received a tax credit certificate from
the director after the director has determined that the employer:
���� (1)�� provides a
recovery-supportive environment for its employees evidenced by a formal working
relationship with a local recovery or treatment provider that meets
qualifications as determined by the director, to provide support for employers
including any necessary assistance in the hiring process of eligible
individuals in recovery from a substance use disorder and training for
employers or supervisors;
���� (2)�� provides
employer-sponsored insurance that meets the requirements of minimum essential
coverage, as that term is defined in 26 U.S.C. s.5000A(f)(1), to an applicable
eligible individual employed by the certified employer; and
���� (3)�� fulfills the eligibility
criteria set forth in section 2 of
P.L. , c. (C. )
(pending before the Legislature as this bill) and by the director to
participate in the program established by section 2 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).
���� "Director" means
Director of the Division of Mental Health and Addiction Services in the
Department of Human Services.
���� "Division" means the
Division of Mental Health and Addiction Services in the Department of Human
Services.
���� "Eligible
individual" means an individual with a diagnosed substance use disorder
who meets criteria to be determined by the director, who is in a state of
wellness where there is an abatement of signs and symptoms that characterize
active addiction, and has demonstrated to the certified employer's
satisfaction, pursuant to guidelines established by the director, that the
individual has completed a course of treatment or is currently in receipt of
treatment for such substance use disorder.� A relapse shall not make the
individual ineligible, as long as the individual shows a continued commitment
to recovery that aligns with an individual's relapse prevention plan, discharge
plan, or recovery plan.
���� "Program" means the
Recovery Tax Credit Program established pursuant to section 2 of P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill).
���� 2.��� a.�� The Recovery Tax
Credit Program is established, and the director shall administer the program to
provide tax incentives to certified employers for the hiring and continued
employment of eligible individuals in recovery from a substance use disorder in
part-time and full-time employment in the State.� The director is authorized to
allocate up to $2,000,000 of tax credits for the program for each calendar year
beginning on January 1, 2021.
���� b.��� To participate in the
program, an employer shall, in a form prescribed by the director, apply
annually to the division by January 15 to claim the credit based on eligible
individuals hired and employed during the preceding calendar year.� As part of
the application, an employer shall:
���� (1)�� Agree to allow the
Division of Taxation in the Department of the Treasury to share the employer�s
tax information with the division.� However, any information shared pursuant to
this paragraph (1) shall be confidential by law and privileged, and shall not
be subject to P.L.1963, c.71 (C.47:1A-1 et seq.).
���� (2)�� Allow the division and
its agents access to limited and specific information necessary to monitor
compliance with program eligibility requirements.� Information accessed
pursuant to this paragraph (2) shall be confidential by law and privileged,
shall not be subject to P.L.1963, c.71 (C.47:1A-1 et seq.), and shall only be
used for the stated purpose of this section.
���� (3)�� Demonstrate that the
employer has satisfied program eligibility requirements and provided all the
information necessary, including the number of hours worked by any eligible
individual, for the director to compute an actual amount of credit allowed.
���� c.���� After reviewing the
application and finding it sufficient, the director shall issue a tax credit
certificate to an employer by March 31.� Each certificate shall include, but
not be limited to, the name and employer identification number of the certified
employer, the amount of credit that the certified employer may claim, and any
other information the Director of the Division of Taxation in the Department of
the Treasury determines is necessary.
���� d.��� (1)���� Unless otherwise
required pursuant to paragraph (2) of this subsection d., a certified employer
shall be entitled to a tax credit in an amount equal to the product of $1 and
the number of hours worked by each eligible individual for the certified
employer in this State during that eligible individual's period of employment.�
The credit shall not be allowed unless the eligible individual has worked in
the State for a minimum of 500 hours for the certified employer, and the credit
shall not exceed $2,000 per eligible individual employed by the certified
employer in the State.�
���� (2)�� In determining the
amount of credit that any employer may claim, the director shall review all
applications submitted for credit by employers and, to the extent that the
total amount claimed by employers exceeds the amount allocated for the program
in that calendar year, shall issue credits on a pro rata basis corresponding to
each employer's share of the total claimed amount.
���� e.���� (1)������� A certified
employer may claim a credit for each eligible employee during the period
starting on the day the employee is hired and ending on December 31 of the
immediately succeeding calendar year or the last day of the employee's
employment by the certified employer, whichever comes first.
���� (2)�� (a)������� If an
eligible individual has worked in excess of 500 hours between the date of hire
and December 31 of that year, an employer may elect to compute and claim a
credit for the employee for that year based on the hours worked by December 31.
���� (b)�� Alternatively, the
employer may elect to include those hours worked by the eligible individual in
the computation of the credit in the year immediately succeeding the year in
which the eligible individual was hired.� If the certified employer so elects, the
credit shall be computed on the basis of all hours worked by the eligible
individual from the date of hire to the earlier of the last day of employment
or December 31 of the year immediately succeeding the eligible individual�s
date of hire.
���� (3)�� A certified employer
shall not claim a tax credit for hours worked by an eligible individual in
excess of 2,000 hours.� A certified employer shall not claim credit more than
once with respect to any eligible individual and shall not aggregate hours
worked by two or more employees to reach the minimum number of hours required.
���� 3.��� The director shall
annually provide to the Director of the Division of Taxation in the Department
of the Treasury program information including, but not limited to, the number
of certified employers participating in the program, unique identifying information
for each certified employer, the number of eligible individuals employed by
each certified employer, unique identifying information for each eligible
individual employed by the certified employers, the number of hours worked by
eligible individuals, the total dollar amount of claims for credit, and the
dollar amount of credit granted to each certified employer.
���� 4.��� The director, in
consultation with the Director of the Division of Taxation in the Department of
the Treasury, shall, pursuant to the "Administrative Procedure Act,"
P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations to effectuate
the purposes of sections 1 through 3 of
P.L. , c. (C. through ).
���� 5.��� a.���� A taxpayer that
is a certified employer as defined pursuant to section 1 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) that has received a
tax credit certificate from the Director of the Division of Mental Health and
Addiction Services in the Department of Human Services 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 the amount shown on the tax credit
certificate.
���� b.��� 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 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-5).� 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.
���� 6.��� a.� A taxpayer that is a
certified employer as defined pursuant to section 1 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) that has received a
tax credit certificate from the Director of the Division of Mental Health and Addiction
Services in the Department of Human Services 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 the amount
shown on the tax credit certificate.
���� b.��� The amount of the credit
applied pursuant to this section for a taxable year, when taken together with
any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et
seq., shall not exceed 50 percent of the taxpayer's liability for tax for the
taxable year that bears the same proportional relationship to the total amount
of such liability as the amount of the taxpayer's gross income, derived from
New Jersey sources and attributable to the business or professional activity in
which the taxpayer employs the eligible individual during that taxable year,
bears to the taxpayer's entire gross income for that year.� The amount of the
credit otherwise allowable under this section which cannot be applied for the
taxable year due to the limitations of this subsection may be carried over, if
necessary to the seven taxable years following the taxable year for which the
credit was allowed.
���� c.���� A business entity that
is classified as a partnership for federal income tax purposes 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 entity income shall be determined
by allocating to the taxpayer that proportion of the credit acquired by the
entity that is equal to the taxpayer's share, whether or not distributed, of
the total distributive income or gain of the entity for its taxable year ending
within or with the taxpayer's taxable year.
���� d.��� A New Jersey S
corporation shall not be allowed a credit directly under the gross income tax,
but the amount of credit of a taxpayer in respect of a pro rata share of S
Corporation income shall be determined by allocating to the taxpayer that
proportion of the credit acquired by the New Jersey S Corporation that is equal
to the taxpayer's share, whether or not distributed, of the total pro rata
share of S Corporation income of the New Jersey S Corporation for its privilege
period ending within or with the taxpayer's taxable year.
���� 7.��� This act shall take
effect immediately and shall apply to privilege periods and taxable years
beginning on and after January 1, 2021.
STATEMENT
���� This bill establishes the
�Recovery Tax Credit Program� (program) to incentivize the hiring and continued
employment of certain individuals in recovery from a substance use disorder.�
Under the bill, the Division of Mental Health and Addiction Services in the
Department of Human Services is required to administer the program to provide
tax incentives to certified employers for hiring and employing eligible
individuals in recovery from a substance use disorder in part-time or full-time
employment in the State.� For an employer to be certified under the bill, the
employer is required to provide employer sponsored insurance coverage that
meets certain minimum essential coverage requirements, and meet certain other
requirements.� The bill authorizes the Director of the Division of Mental
Health and Addiction Services in the Department of Human Services (director) to
allocate up to $2,000,000 of tax credits for the program for each calendar year
beginning on January 1, 2021, to be credited against the Corporation Business
Tax or the Gross Income Tax.
���� To participate in the program,
an employer is required to apply annually to the Division of Mental Health and
Addiction Services (division) to claim credit based on the number of hours
worked by eligible individuals employed during the preceding calendar year.�
The director is required to issue a tax credit certificate to employers by
March 31 each year.
���� The bill specifies that a
certified employer is generally entitled to a tax credit equal to the product
of $1 multiplied by the number of hours worked by each eligible individual
hired and employed by the certified employer during that eligible individual's
period of employment, provided that a credit is not to be allowed unless an
eligible individual has worked in the State for a minimum of 500 hours for the
employer and that the credit per eligible individual is prohibited from
exceeding $2,000.� The bill further specifies, however, that in determining the
amount of credit that any employer may claim, the director is required to
review all claims submitted for credit by employers and, to the extent that the
total amount claimed by employers exceeds the amount allocated for the program
in that calendar year, is required to issue credits on a pro rata basis
corresponding to each employer�s share of the total claimed amount.
���� Under the bill, a certified
employer is permitted to claim a credit for the period starting on the day the
employee is hired and ending on December 31 of the immediately succeeding
calendar year or the last day of the employee's employment by the certified
employer, whichever comes first.� If, however, an eligible individual has
worked in excess of 500 hours between the date of hiring and December 31 of
that year, an employer may elect to compute and claim a credit for such
employee for that year based on the hours worked by December 31, or may elect
to include the hours worked by the eligible individual in the computation of
the credit in the year immediately succeeding the year in which the eligible
individual was hired.
���� Under the bill certified
employers are prohibited from claiming a tax credit for hours worked by an
eligible individual in excess of 2,000 hours, from claiming credit more than
once with respect to any eligible individual, and from aggregating hours worked
by two or more employees to reach the minimum number of hours.
���� The bill requires the director
to annually provide to the Director of the Division of Taxation in the
Department of the Treasury certain program information. The director is also
required, in consultation with Director of the Division of Taxation in the Department
of the Treasury, to adopt rules and regulations to effectuate the purposes of
the program.
���� Under the bill, the amount of
the credits allowed against the taxes imposed are prohibited from exceeding 50
percent of the taxpayer's liability for tax, and may be carried over, if
necessary to the seven privilege periods or taxable years.� The bill also
provides for the allocation of tax credits under the program to certain
certified employers.