| Wage Credit |
Description |
Availability |
Renewal Community Employment Credit (RC Wage Credit)
IRS Form 8844 |
Credit against federal taxes of up to $1,500 during each year of RC designation for every existing employee and new hire who live and work in the RC. A qualified employee is any employee who performs substantially all of his or her services within the RC and while performing those services, the employee has his or her main home within an RC. The credit is available for both full-time and part-time employees as long as they have been employed for at least 90 days. The amount of the credit is tied to the amount of wages paid rather than to the number of hours worked. |
Credit available January 1, 2002, through December 31, 2009. Cannot count wages for the RC Wage Credit and the WOTC and WtW credits. A business does not have to be located in an RC to qualify. |
Work Opportunity Tax Credit (WOTC)
IRS Forms 5884 and 8850 |
Credit of 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 RC and summer hires ages 16 to 17 who live in an RC. Includes veterans, ex-felons and food stamp recipients. |
A business does not have to be located in an RC to qualify. It cannot be combined with WtW credits. The State Employment Services Agency must certify if an employee is in a targeted group. |
| Welfare to Work (WtW) Credit |
Two year credit against federal taxes for businesses that hire long term family assistance recipients. Credits up to $3,500 the first year and $5,000 for the second year for each new hire. |
It cannot be combined with the WOTC. The State Employment Agency must certify if an employee is in a targeted group. |
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| Deduction |
Description |
Availability |
Increased Section 179 Deduction
IRS Form 4562 |
Allows businesses to claim increased Section 179 deduction (up to $20,000 in additional expensing increasing to $35,000 for property acquired after December 31, 2001) if the business qualifies as an RC business. It can be claimed on certain depreciable property such as machinery and equipment. |
Can be used in an RC on developable sites after December 31, 2001. At least 35% of the company's employees must live in an RC. |
Commercial Revitalization Deduction
See IRS Publication 946 |
Deduction of either one-half of qualified revitalization expenditures (QREs) in the first year a building is placed in service or all of QREs on a prorated basis over 10 years if QREs have been allocated to revitalization of a non-residential building located in an RC. |
Available in RC's for buildings placed in service after December 31, 2001, and before January 1, 2010. State may allocate up to $12 million (not more than $10 million per project) each year 2002-2009 for each RC in the State. The business does not have to be an RC business. |
| Environmental Cost Deduction (Brownfields) |
A business 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. |
Includes costs paid or incurred after August 5, 1997, and before January 1, 2004. A qualified contaminated site must be used in a trade or business, for the production of income, or as inventory and there has been a release, threat of release, or disposal of a hazardous substance at or on the site. |
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| Capital Gains |
Description |
Availability |
Zero Percent Capital Gains for RC Assets
See IRS Publication 954 |
The holder, for a minimum of 5 years, of an RC asset acquired between January 1, 2002 and December 31, 2009, will not have to include in its gross income "qualified capital gain" from the sale or exchange of the asset. |
Exclusion applies only to an interest in, or property of, certain businesses operating in the RC. Examples of RC assets include business stock or properties. Only gains attributable to the period from January 1, 2002, through December 31, 2014, may be excluded. |
