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Bill

Bill

S 3688

Allows corporation business tax and gross income tax credits to businesses employing released nonviolent offenders.

2026-2027 Regular Session Introduced by Tony Bucco

New Jersey would offer 15% wage credits (up to $900 per released nonviolent offender) against CBT and GIT taxes to encourage employers to hire eligible ex-offenders.

Introduced in the Senate, Referred to Senate Economic Growth Committee
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Bill Summary · S 3688

Summary of Bill S 3688 (2026, New Jersey)

Purpose and intent

S 3688 proposes to encourage private sector employment of released nonviolent offenders by granting tax credits to businesses. The credits would apply against two major New Jersey taxes: the corporation business tax and the gross income tax. The underlying goal is to support rehabilitation and reintegration of nonviolent ex-offenders by reducing the after-tax cost of employing them.

Key provisions

  • Credit against the Corporation Business Tax (CBT):

    • Eligible taxpayers may claim a credit equal to 15% of wages paid to each released nonviolent offender during the privilege period.
    • The credit per offender is capped at $900.
    • The total credits cannot reduce the taxpayer’s CBT liability to less than the statutory minimum, and credits may not exceed 50% of the tax liability for the privilege period when combined with other credits.
    • Any unused credit can be carried forward for up to seven privilege periods after the period in which the credit was allowed.
    • The Director of the Division of Taxation determines the priority of this credit relative to other credits.

  • Credit against the Gross Income Tax (GIT):

    • Eligible taxpayers may claim a credit equal to 15% of wages paid to each released nonviolent offender during the taxable year.
    • The credit per offender is capped at $900.
    • The total credits cannot exceed 50% of the taxpayer’s New Jersey tax liability for the year, with the calculation tied to the proportion of New Jersey-sourced gross income attributable to the business activity in which the offender is employed.
    • Any unused credit can be carried forward for up to seven taxable years.
    • Special allocation rules: partnerships and S corporations have specific rules to allocate credits to individual partners/shareholders based on their distributive share or pro rata share of income.

  • Definition of “released nonviolent offender”:

    • An adult (18+) who committed a nonviolent offense (excluding certain listed offenses, notably dangerous offenses and offenses involving force or threat to use force) and who has been released to the community under supervision or has completed community supervision.

  • Effective date and applicability:

    • The act takes effect immediately and applies to wages paid in privilege periods and taxable years beginning after enactment.

Who would be affected

  • Businesses subject to New Jersey’s corporation business tax and gross income tax that employ released nonviolent offenders.
  • Released nonviolent offenders themselves may benefit indirectly through increased employment opportunities and stability in earnings.
  • Taxpayers with credits limited by overall tax liability or by minimum tax requirements would experience reduced effects, but can carry forward unused credits.

Potential impact and considerations

  • The bill aligns with federal Work Opportunity Tax Credit objectives by incentivizing employers to hire nonviolent ex-offenders.
  • It carves out a specific, limited category of offenders (nonviolent, with certain exceptions) to target rehabilitation efforts without broadening subsidies to violent or high-risk offenses.
  • The program’s effectiveness would depend on the take-up rate by employers, the administrative procedures for applying credits, and the balance with existing tax incentives and minimum tax constraints.
  • Administrative notes include credit ordering by the Director and cross-entity allocation rules for partnerships and S corporations.

Compiled from official sources — confirm details with the bill’s official record.

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