CA SB1272

Allows a tax credit for taxable years 2016-2020 for qualified small businesses that make matching contributions to employee savings plans, equal to 50% of matching contributions up to $1,000 maximum per year.

Applies to both personal income tax (Section 17053.50) and corporation tax (Section 23650) for businesses with gross receipts of $10 million or less and fewer than 100 employees.

Requires participating employees to have California wages subject to unemployment insurance, be employed at least 6 months, and at least half of participating employees must earn less than $40,000 annually.

Restricts credit eligibility if employees withdraw funds within 12 months of their first contribution or previous withdrawal, unless the withdrawal qualifies as a "qualified withdrawal" to individual retirement accounts or Secure Choice accounts.

Requires the Franchise Tax Board to report annually by January 1, 2018 and thereafter on the percentage of employees under 30 and earning less than $40,000 who receive matching contributions; the credit provision repeals December 1, 2022.