Empowerment
Zone Employment Credit
(EZ Wage Credit) |
Credit
against Federal taxes up to $3,000 for businesses for each year
of EZ designation for every existing employee and new hire who lives
and works in the EZ. |
January
2002 through December 2009. Cannot count wages for both the WOTC
and WtW credits and the EZ Wage credit |
Work
Opportunity Tax Credit
(WOTC) |
Credit
up to $2,400 against Federal taxes for businesses for each new hire
from groups that have high unemployment rates or other special employment
needs, including youth ages 18 to 24 who live in an EZ, EC or RC,
and summer hires ages 16 to 17 who live in an EZ, EC, or RC. |
Expires
for individuals who begin work after December 2001. Business does
not have to be in EZ. Cannot be combined with WtW credit. State
Employment Services Agency must certify employee is in targeted
group. |
| Welfare-to-Work
Tax Credit (WtW) |
Two-year
credit against Federal taxes for businesses that hire long-term
family assistance recipients. Credits up to $3,500 for the first
year, and $5,000 for the second year for each new hire. |
Expires
for individuals who begin work after December 2001. Business does
not have to be in an EZ. Cannot be combined with WOTC. State Employment
Services Agency must certify employee is in targeted group. |
| Increased
Section 179 Deduction |
Allows
businesses to claim increased Section 170 deduction (up to $20,000
in additional expensing increasing to $35,000 for property acquired
after December 2001) if the businesses qualifies as an Enterprise
Zone Business or Renewal Community Business. Can be claimed on certain
depreciable property such as equipment and machinery. |
Cannot
be used in developable sites until after December 2001. Can only
be used in EZs. |
| Environmental
Cleanup Cost Deduction (Brownsfields) |
Businesses
can elect to deduct qualified cleanup costs of hazardous substances
in certain areas (brownfields) in the tax year the business pays
or incurs the costs. |
Property
is not required to be located in an EZ. Need certification from
State environmental agency. Includes costs paid or incurred prior
to January 2004. |
| Enterprise
Zone Facility Bonds |
State
and local governments can issue Enterprise Zone Facility Bonds (a
type of tax-exempt bond) to make loans at lower interest rates to
Enterprise Zone Businesses to finance Qualified Zone Property. |
$3
million per borrower limit in any Round I EZ for bonds issued prior
to January 2002, or in any EC, with a $20 million per borrower nationwide
limit; must have State volume cap allocated. 35 percent of employees
must be EZ residents. |
| Qualified
Zone Academy Bonds (QZABs) |
State
or local governments can issue bonds at 0-percent interest cost
to them to finance public school programs with private business
partnerships. Private businesses must contribute money, equipment
or services equal to 10 percent of bond proceeds (which may qualify
as a charitable contribution). The Federal Government pays interest
in the form of tax credit to banks, insurance companies, and certain
lending corporations that hold QZABs. |
Federal
allocation to States annually from 1998-2001. State education agency
allocates credit to Qualified Zone Academy to finance materials,
teacher training, building renovation, or equipment for programs
that prepare students for jobs or college. Schools must be located
in an EZ or EC or have 35 percent of students eligible for fee or
reduced-cost lunch program. |
| New
Markets Tax Credit |
Equity
investors in qualified Community Development Entities (CDEs) can
obtain a tax credit against Federal taxes of 5 to 6 percent of the
amount invested for each of the yeas the investment is held, for
up to 7 years of the credit period. |
Allocations
of the credit will be made annually from 2001 to 2007 to qualified
CDEs. Investors must purchase stock or partnership interest in a
CDE for cash at original issuance. Credit available at time of purchase
(1 year) and on 6 anniversary dates of acquisition of investment. |
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