Proposed Income Tax Deduction for Employers of Criminals – Unicameral Update


Businesses that hire felons would receive a state income tax deduction under a proposal heard Feb. 17 by the Revenue Commission.

Senator Justin Wayne


The senator. justin wayne

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Senator Justin Wayne

Under LB917, introduced by Omaha Sen. Justin Wayne, federal adjusted gross income or federal taxable income of a business would be reduced by 65% ​​of the salary paid to a person convicted of a crime.

The deduction would apply to salaries paid during the individual’s first 12 months of employment, and the total deduction per employee could not exceed $20,000.

Wayne said the bill aims to reduce Nebraska’s recidivism rate by encouraging companies to hire felons within the first year after they are released from prison.

“The quickest and easiest way to reduce recidivism is to get people a well-paying job when they get out,” he said.

Employers of criminals typically pay higher insurance premiums, Wayne said, and the proposed tax deduction would help offset those costs.

The State Department of Revenue estimates that LB917 would reduce general fund revenue by $2.6 million in fiscal year 2023-24 and $2.6 million in fiscal year 2024-25 .

Danielle Conrad testified in support of the bill on behalf of the ACLU of Nebraska. She said it would supplement a federal tax credit for employers of criminals and help address overcrowding in Nebraska prisons.

“Every investment we can make to ensure successful reintegration and reduce recidivism helps address our current challenges of mass incarceration and racial injustice, which are literally blowing our budgets and overwhelming our taxpayers,” said Konrad.

No one testified against the bill and the committee took no immediate action on it.

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