Renewal Community Empowerment Zone

The Empowerment Zone tax incentives and the Renewal Community tax incentives, are incentives to encourage businesses to open, expand, and to hire local residents who both live and work in an empowerment zone. The incentives include employment credits, a 0% tax on capital gains, increased tax deductions on equipment, accelerated real property depreciation, and other incentives. The EZ/RC tax incentives were provided as a tool for the designees to stimulate job creation and retention and business investment in buildings and equipment. The interagency partnership between HUD and IRS is essential because HUD has the economic development expertise and IRS has the tax expertise.

Challenges:

The residents, businesses and community organizations in the Lawrence Renewal Community Zone (RC) have long faced difficult economic challenges. The challenges are being addresses by development strategies:

Reducing the tax rates within the RC to include the industrially-zoned areas
Increasing local services
Implementing crime reduction strategies
Increasing involvement by community partners, including

The Lawrence Gateway Initiative
The Lawrence Small Business Center
Small Business Revolving Loan Fund
The Lawrence Façade Improvement Program
Massachusetts Development Finance Agency
Massachusetts Community Development Finance Corporation

Qualified zone employee:

Employee performs substantially all of the services for you within an empowerment zone in your trade or business
Employee’s main home is within the empowerment zone for services performed in the zone

Tax Incentive Guide for Businesses:

Details of Tax Incentive Guide for Businesses are available at: http://www.hud.gov/offices/cpd/economicdevelopment/library/taxguide2003.pdf

Incentives Wage Credits: (ww.irs.ustreas.gov)

Empowerment Zone Employment Credit (EZ Wage Credit). IRS Tax Form 8844.
Renewal Community Employment Credit (RC Wage Credit). IRS Tax Form 8844.
Work Opportunity Tax Credit (WOTC). IRS Tax Forms 5884 and 8850.
Welfare to Work (WtW) Credit. IRS Tax Forms 5884, 8850, and 8861.
Indian Employment Tax Credit. IRS Tax Form 8845.

Tax Incentives for Distressed Communities:

Publication 954 is available at the following
website: http://www.irs.gov/pub/irs-pdf/p954.pdf

Renewal Community & Empowerment Zone - HUD Address Locator:

To determine if a new hire is within the zone go to the following website and enter their address.
The website address is: http://egis.hud.gov or www.hud.gov/crlocator
If the EZ/RC Locator is down direct your questions to either, egis@hud.gov or call 877-483-8282, option 3.

Empowerment Zone and Renewal Community Empowerment Credit:

Use form 8844 to claim the empowerment zone and renewal community employment (EZRCE) credit.

20% of the employer’s qualified wages of qualified empowerment zone employees plus
15% of the employer’s qualified wages of qualified renewal community employee

Business Services