Within United States federal legislation , an empowerment zone is an economically distressed community eligible to receive tax incentives and grants from the United States federal government under the Empowerment Zones and Enterprise Communities Act of 1993 .
24-453: The Empowerment Zone Program consists of three US congressional designations. The Renewal Communities (RCs), Empowerment Zones (EZs) and Enterprise Communities (ECs) are highly distressed urban and rural communities that may be eligible for a combination of grants, tax credits for businesses, bonding authority and other benefits. Highly distressed refers to communities who have experienced poverty and/or high emigration based upon definitions in
48-538: A 0% tax on the capital gains of assets sold, provided the business holds the asset at least five years. Businesses in RCs that build or substantially rehabilitate commercial property may also be eligible for up to $ 10 million in Commercial Revitalization Deductions to rapidly increase their depreciation schedules. For detailed information on all RC/EZ tax incentives, including which tax forms to file to claim
72-413: A 0% tax on the capital gains of assets sold, provided the business holds the asset at least five years. Businesses in RCs that build or substantially rehabilitate commercial property may also be eligible for up to $ 10 million in Commercial Revitalization Deductions to rapidly increase their depreciation schedules. For detailed information on all RC/EZ tax incentives, including which tax forms to file to claim
96-491: A combination of grants, tax credits for businesses, bonding authority and other benefits. Highly distressed refers to communities who have experienced poverty and/or high emigration based upon definitions in the law. These designations, RCs, EZs and ECs were awarded in three competitions since 1994. The program was the legislative response to riots that erupted in 1992 in Los Angeles after justification of police officers charged in
120-400: A high rate of poverty and high unemployment rate (compared to rates nationwide). The communities must have under 200,000 people in them, but can be any physical size. Local and state governments must be involved with a community gaining this designation. They are required to participate by making their own commitments to taking action to reduce economic burdens on employers and businesses in
144-586: A population greater than 200,000. Qualifying businesses in EZs are eligible for employment credits (up to $ 3,000 yearly per EZ resident employed). Qualifying EZ businesses are also eligible for low-cost loans through EZ facility bonds, increased Section 179 tax deductions, partial-exclusion of tax on capital gains upon the sale of certain assets, and other incentives. Qualifying businesses in RCs are also eligible for employment credits (up to $ 1,500 yearly per RC resident employed). Qualifying RC businesses are also eligible for
168-540: A population greater than 200,000. Qualifying businesses in EZs are eligible for employment credits (up to $ 3,000 yearly per EZ resident employed). Qualifying EZ businesses are also eligible for low-cost loans through EZ facility bonds, increased Section 179 tax deductions, partial-exclusion of tax on capital gains upon the sale of certain assets, and other incentives. Qualifying businesses in RCs are also eligible for employment credits (up to $ 1,500 yearly per RC resident employed). Qualifying RC businesses are also eligible for
192-610: A population greater than 200,000. Qualifying businesses in RCs are eligible for employment credits (up to $ 1,500 yearly per RC resident employed). Qualifying RC businesses are also eligible for a 0% tax on the capital gains of assets sold, provided the business holds the asset at least five years. Businesses in RCs that build or substantially rehabilitate commercial property may also be eligible for up to $ 10 million in Commercial Revitalization Deductions to rapidly increase their depreciation schedules. For detailed information on all RC/EZ tax incentives, including which tax forms to file to claim
216-513: Is 15% of the qualified wages paid or incurred during a calendar year. The amount of qualified wages you can use to figure the credit cannot be more than $ 10,000 for each employee for each calendar year. As a result, the credit can be as much as $ 1,500 (15% of $ 10,000) per qualified employee each year. These areas have been designated renewal communities: Empowerment zone Within United States federal legislation , an empowerment zone
240-507: Is an economically distressed community eligible to receive tax incentives and grants from the United States federal government under the Empowerment Zones and Enterprise Communities Act of 1993 . The Empowerment Zone Program consists of three US congressional designations. The Renewal Communities (RCs), Empowerment Zones (EZs) and Enterprise Communities (ECs) are highly distressed urban and rural communities that may be eligible for
264-576: The New Markets Tax Credit Program , which has been renewed several times and is still in effect. One provision of the Community Renewal Tax Relief Act of 2000 was the creation of 40 "renewal communities". Renewal communities would receive special tax breaks designed to encourage economic growth by generating business investment and job opportunities. Requirements to being designated a renewal community included having
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#1733084482733288-474: The New Markets Tax Credit Program . The program originally ended on December 31, 2011. However, on February 1, 2013, the Joint Committee on Taxation extended the program for another two years to December 31, 2013. The Protecting Americans from Tax Hikes Act, signed into law on December 18, 2015, later extended the program through the end of 2016. This program is primarily managed through partnerships between
312-932: The United States where qualifying businesses are eligible for billions of dollars in tax incentives. They were created in the Community Renewal Tax Relief Act of 2000 , which was eventually passed as part of the Consolidated Appropriations Act, 2001 . The Community Renewal Tax Relief Act of 2000 is intended to improve development in economically distressed areas of the United States. The law offers "tax incentives for businesses to locate and hire residents in urban and rural areas that have not experienced recent economic expansion." Both rural and urban areas are eligible. Three primary means were used: renewal communities , empowerment zones , and community development entities. The bill also created
336-628: The Empowerment Zone wage tax credit program expired on December 31, 2011, credits can still be claimed by amending tax returns for the years 2009, 2010, and 2011. The Renewal Community program expired on December 31, 2009, but a company can still amend its tax return for 2009 to claim the available credits. Parts of the following urban areas are empowerment zones: Parts of the following rural areas are empowerment zones: Renewal community Renewal Communities (RCs) and Empowerment Zones (EZs) are distressed urban and rural communities in
360-941: The area, as well as taking steps to encourage economic growth. If a community is successful in becoming a designated renewal community, local business "may be entitled to employer wage credits for full-time employees and summer workers, an expanded expense deduction for tangible assets, an accelerated commercial revitalization deduction and a 100% exclusion for capital gains on the sale of certain renewal community business interests or tangible assets." The Departments of Housing and Urban Development (HUD) and Agriculture (USDA) have designated RCs and EZs in three competitions since 1994. Currently, there are 40 HUD RCs, 28 of which are in urban areas and 12 in rural communities. There are 30 HUD EZs, all of which are in urban areas. There are 10 USDA EZs in rural communities only. A couple of RCs have as few as approximately 100 businesses, while several RCs and EZs have more than 5,000 businesses. No RC or EZ has
384-490: The beating of an African-American motorist during the arrest. The Community Renewal Tax Relief Act of 2000 authorized the creation of 40 renewal communities and created the New Markets Tax Credit Program . The program originally ended on December 31, 2011. However, on February 1, 2013, the Joint Committee on Taxation extended the program for another two years to December 31, 2013. The Protecting Americans from Tax Hikes Act, signed into law on December 18, 2015, later extended
408-428: The credit if you pay or incur “qualified zone wages” to a “qualified zone employee”. The credit is 20% of the qualified zone wages paid or incurred during a calendar year. The amount of qualified zone wages you can use to figure the credit cannot be more than $ 15,000 for each employee for each calendar year. As a result, the credit can be as much as $ 3,000 (20% of $ 15,000) per qualified zone employee each year. Although
432-428: The credit if you pay or incur “qualified zone wages” to a “qualified zone employee”. The credit is 20% of the qualified zone wages paid or incurred during a calendar year. The amount of qualified zone wages you can use to figure the credit cannot be more than $ 15,000 for each employee for each calendar year. As a result, the credit can be as much as $ 3,000 (20% of $ 15,000) per qualified zone employee each year. Although
456-495: The incentives, read IRS Publication 954, Tax Incentives for Distressed Communities, available on the IRS website at www.irs.gov. The renewal community employment credit provides businesses with an incentive to hire individuals who both live and work in a renewal community. Employers can claim the credit if they pay or incur “qualified zone wages” to a “qualified zone employee”. The credit is for wages paid or incurred after 2001. The credit
480-521: The incentives, read IRS Publication 954, Tax Incentives for Distressed Communities. The empowerment zone employment credit provides businesses with an incentive to hire individuals who both live and work in an empowerment zone. (An exception applies to the Washington, DC empowerment zone. Individuals who work in the Washington, DC empowerment zone may live anywhere in the District of Columbia .) You can claim
504-418: The incentives, read IRS Publication 954, Tax Incentives for Distressed Communities. The empowerment zone employment credit provides businesses with an incentive to hire individuals who both live and work in an empowerment zone. (An exception applies to the Washington, DC empowerment zone. Individuals who work in the Washington, DC empowerment zone may live anywhere in the District of Columbia .) You can claim
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#1733084482733528-400: The law. These designations, RCs, EZs and ECs were awarded in three competitions since 1994. The program was the legislative response to riots that erupted in 1992 in Los Angeles after justification of police officers charged in the beating of an African-American motorist during the arrest. The Community Renewal Tax Relief Act of 2000 authorized the creation of 40 renewal communities and created
552-568: The local entity and either the Department of Housing and Urban Development (HUD) for RCs and urban areas or US Department of Agriculture (USDA) for rural EZs and ECs. Currently, there are 40 HUD RCs, 28 of which are in urban areas and 12 in rural communities. There are 30 HUD EZs, all of which are in urban areas. There are 10 USDA EZs and 20 USDA ECs in rural communities. A couple RCs have as few as approximately 100 businesses, while several RCs and EZs have more than 5,000 businesses. No RC, EZ or EC has
576-619: The program through the end of 2016. This program is primarily managed through partnerships between the local entity and either the Department of Housing and Urban Development (HUD) for RCs and urban areas or US Department of Agriculture (USDA) for rural EZs and ECs. Currently, there are 40 HUD RCs, 28 of which are in urban areas and 12 in rural communities. There are 30 HUD EZs, all of which are in urban areas. There are 10 USDA EZs and 20 USDA ECs in rural communities. A couple RCs have as few as approximately 100 businesses, while several RCs and EZs have more than 5,000 businesses. No RC, EZ or EC has
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