SECTION 3.4. Tax Refunds for Wages Paid to an Employee Receiving Financial Assistance

(a) Tax refund. A person who employs individuals who receive aid to families with dependent children, referred to as "employer" in this section, may apply for a refund of tax paid by the person to this state if the tax is administered by the comptroller and deposited to the credit of the general revenue fund without dedication, as described in Labor Code, §301.102(b).

(b) Eligibility. To be eligible for this refund, an employer must file Texas Workforce Commission (TWC) Form 1098, or any successor form, with the TWC. The TWC will determine an employer's eligibility based on the requirements of Labor Code, Chapter 301, Subchapter H. For eligible employers, the TWC will certify the maximum allowable refund to the comptroller. After receipt of the certification, the comptroller will process the refund subject to the limitation in subsection (c) of this section.

(c) Limitation. The refund an employer receives for a calendar year is limited to the lesser of the amount certified by the TWC or the amount of net tax paid to this state by the employer, after any other applicable tax credits, in that calendar year.

(1) If the amount certified by the TWC is more than the tax paid by the employer to this state, the comptroller may contact the employer to obtain records regarding Texas tax paid by the employer on purchases during the calendar year at issue. If the employer can prove the payment of additional Texas tax during the calendar year, the comptroller may increase the refund amount.

(2) If the amount certified by the TWC is still more than the tax paid by the employer to this state, the comptroller will only grant the refund up to the amount of tax paid to this state. This may result in the refund being granted in part and denied in part.

Source Note: The provisions of this §3.4 adopted to be effective March 20, 2023, 48 TeReg 1566