Empowerment Zone Wage Tax Credit

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Housing and Urban Development, Department of Federal
The Empowerment Zone Wage Tax Credit provides businesses with an incentive to hire individuals who both live and work in an Empowerment Zone. Employers can claim a federal tax credit of up to $3,000 for each full- or part-time employee who is an Empowerment Zone resident. The credit is based on 20% of the first $15,000 in wages earned by the qualifying employee.

Empowerment Zones (EZs) were created by the U.S. Department of Housing and Urban Development (HUD) to encourage business growth and economic development in low-income communities. New York City has two Empowerment Zones, one located in Upper Manhattan and one in the South Bronx.

The credit can be claimed if the business pays qualified zone wages to a qualified zone employee. A qualified zone employee is any employee who meets both the following tests:
  1. The employee performs substantially all of his or her services for you within an empowerment zone and in your trade or business.
  2. While performing those services, the employee’s main home is within that EZ.

Employers must verify their business location and employees address as being inside an EZ. This can be done using HUD’s Empowerment Zone address locator, available alongside a map of the zone, under Links to Additional Information, below.

Qualified zone wages are wages, subject to the Federal Unemployment Tax Act, paid for services performed by an employee while a qualified zone employee. This also includes any wages paid to train or educate qualified zone employees.

For additional detail on qualified employees and wages, consult Form 8844, Empowerment Zone and Renewal Community Credit.


For more information, contact:

Upper Manhattan Empowerment Zone
Upper Manhattan Empowerment Zone Development Corporation
55 West 125th Street, 11th Floor
New York, NY 10027
Phone: (212) 410-0030
Fax: (212) 410-9083
Website: http://www.umez.org

South Bronx Empowerment Zone
Bronx Overall Economic Development Corporation
851 Grand Concourse
Suite 123
Bronx, NY 10451
Phone: (718) 590-6252
Fax: (718) 590-3499
info@boedc.org

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