Tax Tip: Special tax benefits still available in 40 designated empowerment zones
Eligible businesses can still claim Empowerment Zone tax benefits through the end of this year.
Reminder to Businesses: Special Tax Benefits Still Available in 40 Designated Empowerment Zones
Eligible businesses can still claim Empowerment Zone tax benefits through the end of this year. Empowerment Zones are certain urban and rural areas where employers and other taxpayers qualify for special tax benefits.
The Department of Housing and Urban Development and the Department of Agriculture designated 40 economically distressed locations as empowerment zones. Find a list of them in the instructions to IRS Form 8844.
Key Empowerment Zone tax benefits include:
Empowerment Zone Employment Credit. Eligible employers can claim this credit on Form 8844. It is worth up to $3,000 and is available to businesses based on wages paid to each qualified employee who both lives and works in an empowerment zone,
Increased expensing for qualifying depreciable property,
Tax-exempt bond financing,
Deferral of capital gains tax on the sale of qualified assets sold and replaced, and
Partial exclusion of capital gains tax on certain sales of qualified small business stock.
Find more information about empowerment zones on HUD’s website at https://www.hudexchange.info/programs/community-renewal-initiative.
Remember that all of the web page addresses for the official IRS website, IRS.gov, begin with http://www.irs.gov. Don't be confused or misled by Internet sites that end in .com, .net, .org or other designations instead of .gov. The address of the official IRS governmental Web site is http://www.irs.gov/.