AN ACT to enact the work opportunity tax credit.

The General Assembly of North Carolina enacts:

SECTION 1.  Part 1 of Article 4 of Subchapter I of Chapter 105 of the General Statutes is amended by adding a new section to read:

§ 105‑130.49.  Work Opportunity credit.

(a)        Definitions. – The following definitions apply in this section:

(1)        Eligible vocational rehabilitation referral. – A vocational rehabilitation referral who (i) was unemployed prior to being hired by the taxpayer applying for the credit provided by this section and (ii) is employed by the taxpayer for at least 20 hours per week at an hourly wage above minimum wage for at least 12 consecutive weeks during the calendar year.

(2)        Vocational rehabilitation referral. – Defined in section 51 of the Code.

(b)        Credit. – A taxpayer that employs an eligible vocational rehabilitation referral is allowed a credit against the taxes imposed by this Part equal to the amount allowed under section 51 of the Code.

(c)        Limitations. – The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of a taxpayer.

(d)       Substantiation. – To claim a credit allowed by this section, the taxpayer must provide any information required by the Secretary of Revenue, including the information required to be included in the report required by subsection (e) of this section. Every taxpayer claiming a credit under this section must maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the taxpayer is entitled. The burden of proving eligibility for a credit and the amount of the credit rests upon the taxpayer, and no credit may be allowed to a taxpayer that (i) fails to maintain adequate records or to make them available for inspection or (ii) terminates an employee or otherwise reduces its workforce for the purpose of creating a new hire eligible for the credit provided by this section.

(e)        Reports. – The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by credit and by taxpayer:

(1)        The number of taxpayers that took the credits allowed in this section.

(2)        The amount of each credit claimed.

(3)        The total cost to the General Fund of the credits claimed.

SECTION 2.  Part 2 of Article 4 of Subchapter I of Chapter 105 of the General Statutes is amended by adding a new section to read:

§ 105‑153.11.  Work Opportunity credit.

(a)        Definitions. – The following definitions apply in this section:

(1)        Eligible vocational rehabilitation referral. – A vocational rehabilitation referral who (i) was unemployed prior to being hired by the taxpayer applying for the credit provided by this section and (ii) is employed by the taxpayer for at least 20 hours per week at an hourly wage above minimum wage for at least 12 consecutive weeks during the calendar year.

(2)        Vocational rehabilitation referral. – Defined in section 51 of the Code.

(b)        Credit. – A taxpayer that employs an eligible vocational rehabilitation referral is allowed a credit against the taxes imposed by this Part equal to the amount allowed under section 51 of the Code.

(c)        Limitations. – The credit allowed under this section may not exceed the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, except payments of tax made by or on behalf of a taxpayer.

(d)       Substantiation. – To claim a credit allowed by this section, the taxpayer must provide any information required by the Secretary of Revenue, including the information required to be included in the report required by subsection (e) of this section. Every taxpayer claiming a credit under this section must maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the taxpayer is entitled. The burden of proving eligibility for a credit and the amount of the credit rests upon the taxpayer, and no credit may be allowed to a taxpayer that (i) fails to maintain adequate records or to make them available for inspection or (ii) terminates an employee or otherwise reduces its workforce for the purpose of creating a new hire eligible for the credit provided by this section.

(e)        Reports. – The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by credit and by taxpayer:

(1)        The number of taxpayers that took the credits allowed in this section.

(2)        The amount of each credit claimed.

(3)        The total cost to the General Fund of the credits claimed.

SECTION 3.  This act is effective for taxable years beginning on or after January 1, 2023.