Work Opportunity Tax Credit

Empowerment Zone Employment Credits

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Empowerment Zone Employment Credits

The Empowerment Zone Employment Credit was established to provide businesses located in a targeted area with an incentive to hire individuals who both live and work in one of these targeted areas.

The Empowerment Zone Credit is a 20% credit on the first $15,000 of wages per eligible employee each year for a maximum annual credit per employee of $3,000. Unlike WOTC, the Empowerment Zone Credit can be claimed each year an individual is employed.

To qualify for an Empowerment Zone Credit, an individual does not need to work a minimum number of hours, but instead, they must be employed for at least 90 calendar days.

Employees who are certified for WOTC can still qualify for the Empowerment Zone Credit, however WOTC will reduce the maximum wages for each of these credits by the amount of wages that are used to calculate their WOTC credit.

By taking advantage of both credits, a new hire who is certified for WOTC as an Unemployed Disabled Veteran can earn a tax credit of up to $9,600 during their first year of employment, and up to $3,000 a year for each year thereafter.

 

 

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