Objective

To assess the extent of implementation of the five recommendations – three addressed to the Department of Labor and two addressed to the Department of Taxation and Finance – from our initial audit report, New York Youth Jobs Program (2017-S-69).

About the Program

The New York Youth Jobs Program (Program), established in 2011, is intended to create jobs and spur economic growth in the State by establishing incentives for employers to hire new employees and retain existing ones. Under the Program, eligible employers may receive tax credits when they hire unemployed or underemployed youth aged 16 to 24 who live in New York State and to whom one or more additional criteria apply, such as being currently or formerly in foster care or being homeless. Employers are entitled to claim tax credits equal to $750 per month, for up to six months, for each full-time employee or equal to $375 per month, for up to six months, for each part-time employee who worked at least 20 hours per week (or 10 hours per week for employees enrolled full-time in high school). Retaining employees beyond the initial six months results in an additional credit to the employers. The Department of Labor (Labor) certifies both employer and youth eligibility and also calculates the dollar amount of tax credits that an employer is entitled to claim. The Department of Taxation and Finance (Tax and Finance) establishes procedural requirements for claiming Program tax credits and processes employers’ tax forms. The 2018-19 Enacted Budget allocated $40 million to the Program annually for the years 2018-2022.

Our initial audit report, issued January 9, 2019, sought to determine whether Labor was ensuring that employers met Program eligibility requirements and were certified, and that the youth they hired were eligible for the Program. The audit also determined whether Tax and Finance was ensuring that tax credits were appropriately granted under the Program. We found that Labor could improve its methods for verifying youth eligibility, and Tax and Finance could do better to ensure that the tax credits granted are accurate and only for Program-eligible youth.

Key Findings

We found that Labor and Tax and Finance implemented the five recommendations – three addressed to Labor and two addressed to Tax and Finance – from our initial audit report.