Income tax benefit for employers of felons amended, advanced

Businesses that hire felons would be eligible for a state income tax credit under a bill advanced from select file March 23.

Sen. Justin Wayne
Sen. Justin Wayne

Under LB917, as introduced by Omaha Sen. Justin Wayne, a company’s federal adjusted gross income or federal taxable income would have been reduced by 65 percent of the wages paid to an individual who has been convicted of a felony.

Wayne introduced an amendment on select file, adopted 42-0, under which businesses instead would be eligible for a nonrefundable state income tax credit equal to 25 percent of the wages paid to the eligible employee.

Wayne said businesses requested the change because they are more familiar with claiming income tax credits than deductions.

The credit would apply to wages paid during the first 12 months of the individual’s employment, and the total credit per employee could not exceed $20,000.

The state Department of Revenue could approve up to $5 million in credits each year beginning in tax year 2023.

Senators advanced LB917 to final reading by voice vote.

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