Bill > AB231

This bill creates a tax credit for small businesses (those with fewer than five employees) that hire individuals who have been convicted of a felony, aimed at reducing recidivism by helping ex-felons find employment. For taxable years from 2026 to 2031, qualifying businesses can receive a tax credit equal to 40% of the wages paid to a qualified employee, up to $5,000 per employee. To be considered a qualified employee, an individual must have been convicted of a felony, be hired within one year of conviction or release from prison, work for the employer for at least six months, and perform services in California. The bill requires the Franchise Tax Board to submit annual reports to the Legislature detailing the number of businesses claiming the credit and the average credit value. Any wage deduction claimed for these employees will be reduced by the amount of the tax credit, and the credit cannot be combined with other wage-related tax credits. The primary goal of this legislation is to help ex-felons reintegrate into the workforce and reduce unemployment among this population, with the credit designed to incentivize small businesses to provide job opportunities to individuals with criminal records.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB231