03.10.16 |
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Empowerment Zone Tax Credit Extended Under PATH Act

Road Arrows

With the passage of the PATH Act in December, the Empowerment Zone Tax Credit was extended through December 31, 2016, providing tax credits for businesses and employers that hire employees who reside in designated empowerment zones.1

The tax credit is 20 percent of the employer’s qualified wages (up to $15,000, or a maximum credit of $3,000 per eligible employee) paid or incurred during the calendar year 2015 on behalf of qualified empowerment zone employees.2 Employers can retroactively claim the credit on their federal income tax returns for 2015, as well as the three previous tax years.

A complete listing of designated empowerment zones (both urban and rural areas) is also included in the Instructions for Form 8844, the form used by businesses to claim the credit.3

The Empowerment Zone was first introduced in 1993 along with the Enterprise Community and Renewal Community Initiatives. All are geared towards reducing unemployment and stimulating economic growth by offering federal tax incentives and awarding grants to designated distressed communities.4

Be sure to visit ADP’s Eye on Washington website to keep tabs on the latest legislative updates. For additional resources and tools relating to tax credits, turn to ADP SmartCompliance®.


Learn More About ADP SmartCompliance® Tax Credits


The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice.  The information and services ADP provides should not be deemed a substitute for the advice of any such professional.  Such information is by nature subject to revision and may not be the most current information available.

1,2H.R.2029 – Consolidated Appropriations Act, 2016 – https://www.congress.gov/bill/114th-congress/house-bill/2029/text

32015 Instructions for Form 8844 – https://www.irs.gov/pub/irs-pdf/i8844.pdf

4Welcome to the Community Renewal Initiative – http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopment/programs/rc



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