Recently, the Department of Finance re-designated the census tracts, altering the Designated Geographic Area (DGA) in which employees must live in order for an employer to be eligible for the New Employment Credit. (FTB Tax News (January 2025)) Some census tracts previously eligible are no longer in the DGA. Other census tracts previously not within the DGA have been added and are now eligible. This new designation will be effective January 1, 2025.
The New Employment Credit is a tax credit intended to encourage hiring of targeted populations (e.g., unemployed, persons, veterans, public benefit recipients) in specific areas of the state. To claim the credit, businesses must have employees working in an eligible area (aka, the DGA), which includes census tracts in the state with higher unemployment and poverty rates and excludes tracts with lower rates. The Department of Finance originally identified the census tracts in 2014 when the New Employment Credit went into effect.
Additional information regarding eligibility for the New Employment Credit is available at:
www.ftb.ca.gov/file/business/credits/new-employment-credit/index.html
Taxpayers planning to claim the credit should check the DGA map tool to determine if the area where their employees are working is within the updated DGA. Within the map tool, users can view both the new DGA and the previous DGA. Users can enter an address to determine if it’s within the DGA during a particular time period.
The map is available at:
