This bill amends the Income Tax Act of 1967 by adding a new section, 714, which establishes a work opportunity tax credit for employers that are organizations exempt from federal taxation under section 501(c) of the Internal Revenue Code. Starting from tax years beginning on or after January 1, 2026, these employers can claim a credit against their withholding tax obligations for qualified wages paid to qualified employees. The credit amount is set at 50% of the credit the employer is allowed to claim under section 51 of the Internal Revenue Code, with specific exclusions for amounts related to non-qualified employees and unused credits carried from other tax years.

Additionally, the bill outlines the process for claiming this credit, stating that it must be reported on the annual return or report required under section 711. If the credit exceeds the employer's withholding tax liability, the excess amount will not be refunded. The bill also defines key terms such as "member of a targeted group," "qualified employee," and "qualified wages" in relation to the tax credit. The enactment of this bill is contingent upon the passage of Senate Bill No. 995 of the 103rd Legislature.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847