Federal Empowerment Zone Tax Credit
Unlock significant tax savings by retaining your workforce during challenging times.
Federal Empowerment Zone Tax Credit
Unlock significant tax savings by investing in your community
What is the Employee Retention Credit (ERC)?
The Empowerment Zone Tax Credit program is a federal incentive designed to encourage businesses to invest in economically distressed communities. These zones are designated areas where businesses can receive tax benefits if they operate within and hire residents from the community. The goal of these credits is to stimulate economic growth, create jobs, and improve the quality of life in underserved areas.
ARE YOU OR ANY OF YOUR EMPLOYEES IN THE ZONE?
Parts of the following communities are Empowerment Zones:
Pulaski County, AR
Tucson, AZ
Fresno, CA
Los Angeles, CA
Santa Ana, CA
New Haven, CT
Jacksonville, FL
Chicago, IL
Gary/Hammond/East Chicago, IN
Boston, MA
- Baltimore, MD
Detroit, MI
Minneapolis, MN
St. Louis, MO
East St. Louis, IL
Cumberland County, NJ
New York, NY
Syracuse, NY
Yonkers, NY
Cincinnati, OH
- Cleveland, OH
Columbus, OH
Oklahoma City, OK
Philadelphia, PA/Camden, NJ
Columbia/Sumter, SC
Knoxville, TN
El Paso, TX
San Antonio, TX
Norfolk/Portsmouth, VA
Huntington, WV/Ironton, OH
What does the employer get out of this incentive?
The main benefit of the Empowerment Zone Employment Credit allows businesses to claim a tax credit of up to $3,000 per year for each employee who lives and works in the Empowerment Zone. To qualify, businesses must be located within an Empowerment Zone, and employee people who reside in the same area.
This credit is available year after year for the same employee!
Am I An Eligible Employer?
Eligible employers may simply qualify by operating within one of the many country-wide empowerment zones. When an employee lives and performs substantially all of their activities within the same zone, then full eligibility is met and tax credits are earned.
As a courtesy, TIP will check your business address(es) for free. Simply send an email to mailto:info@tipgroup.tax with all addresses where employees perform work.
What Else Do I Need To Know About This Credit?
The Empowerment Zone has a long history of helping to revitalize cities, counties and areas with significant economic needs. This program has been in place since the 1990’s and is currently set to expire on December 31, 2025.
In past years, the program has been extended through various federal budgetary tax law packages. Some of those creating retroactive extenstions. It is reasonable to assume a similar extension will be approved in 2026. If not, the opportunity to benefit from this credit will be limited to 2025 and preceding years withing the three-year lookback rules. This is certainly a reason to act now and maximize your refund/savings.
When Can I Start the Review Process?
Immediately. Based on the potential for this program to remain expired after 2025, all employers who believe they operate or previously operated within an empowerment zone should review for eligibility and benefits ASAP.
How Can We Help?
Tax Incentive Partnership has over 20 years of experience helping businesses not only qualify for and maximize Empowerment Zone Program benefits. We will identify all eligible employees, compute the maximum allowable tax credit values and prepare all necessary tax forms to claim your tax credits. We manage your benefits so you never have to worry about missing these ultra valuable tax savings.
TIP will ensure that your business receives:
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Refunds for prior-year benefits – Current IRS legislation allows a business to retroactively claim refund for these tax credits up to 3 years.
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Current year benefits – Credits will reduce your current tax liability and typically produce a refund.
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Future year benefits – We will manage your empowerment zone benefits for you and ensure you continue to lower your federal income tax liabilities.