Empowerment Zone Tax Credit

The Empowerment Zone Tax Credit is equal to 20% of the first $15,000 in qualified employee wages if the employee lives and works in the zone. To be qualified, the employee must live and work in the zone and have been employed for at least 90 days.

Example 1:

Employee "A" is a qualified employee and earned $11,500 last year with their employer.

$11,500 x 20% = $2,300 in Empowerment Zone Tax Credits

Example 2:

Employee "B" is a qualified employee and earned $31,000 last year with their employer.

$15,000 x 20% = $3,000 in Empowerment Zone Tax Credits

($31,000 was not used because the credit is limited to the first $15,000 in qualified wages)

The Empowerment Zone Tax Credit program was created to give distressed local communities real opportunities for growth and revitalization. Empowerment Zones are selected based on poverty levels, unemployment rate, crime rate and the number of low income households. The communities must apply to become an Empowerment Zone in order to receive this designation.