Vidak Introduces Bill to Establish Pilot Program for Student Intern Tax Credit

Friday, February 16, 2018

Sacramento – Senator Andy Vidak (R-Hanford) today introduced Senate Bill 1337, which will create the Student Intern Tax Credit Pilot Program to allow small businesses to receive a tax credit for hiring interns.

“Internships are incredibly valuable in today’s workforce,” said Vidak. “Internships should be an option for as many of our students as possible.”

Internships provide mutual benefits to both employers and students in high school and college. Student interns are able to gain valuable work experience, learn more about a specific field, apply knowledge learned in the classroom, and develop and build their skills as they prepare to enter the workforce. Many colleges and universities already offer academic credit for students who participate in an internship program.

Businesses that offer internship programs also have a lot to gain. Employers that offer internships are able to recruit future full-time employees, work with energetic people who are motivated to learn and succeed, and strengthen business connections in their local communities.

The idea for SB 1337 was brought to Team Vidak by Porterville Unified School District President Pete Lara, Jr., who wants to expand opportunities for students both in high school and college. The Porterville Pathways program provides students a dynamic, engaging, and effective educational experience that prepares them by combining technical skills with a challenging core curriculum to be college-ready and/or career-ready. To learn more about the Porterville Pathways program and the 14 individual programs available to Porterville Unified School District students, please click here.

In many lower-income areas, however, some businesses do not have the resources to pay their interns. Students who choose not to pursue internships often cite the lack of pay as a key reason.

Offering an incentive to small businesses can stimulate the workforce while allowing student interns to gain valuable hands-on experience.

The Student Intern Tax Credit Pilot Program will allow a small business with annual gross receipts of $2 million or less to receive a tax credit of 50% of the salary paid to each student intern for the first 90 calendar days of employment.

SB 1337 will officially define a “student intern” as either 19 years of age or younger or enrolled in six or more credits at a California Community College, California State University campus, or University of California campus during the current or previous semester or quarter. This five-year pilot program would expire on December 1, 2024, unless extended by the Legislature.