05.29.15 |
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Tennessee Enacts Community Resurgence Job Tax Credit

TennesseeOn May 20, 2015, Tennessee enacted the Community Resurgence Job Tax Credit Act of 2015, which created a new credit for the creation of jobs in high-poverty areas.  The new credit, the Community Resurgence Job Tax Credit (“CRJTC”), is effective July 1, 2015.

The CRJTC provides a credit of $2,500 per new full-time job created by a qualified business, with a minimum threshold of 10 new full-time jobs being required to be eligible for the credit.  To be eligible, the full-time job must pay wages equal to or greater than the state’s average occupational wage for the month of January of the year in which the job was created.

A high-poverty area is defined as a census tract with a poverty level in excess of 30 percent, as determined by the American Community Survey three-year estimates in 2013, and determined decennially thereafter.  A qualified business is defined as any new or existing business located in a high-poverty area.

As with existing job tax credits in Tennessee, the CRJTC requires that the qualified business shall file a business plan with the Commissioner of the Department of Revenue in order to be eligible for the credit.  The plan shall describe the type of business, number of jobs to be created, expected dates the jobs will be filled, and the effective date of the plan.  Jobs must be created within three years of the effective date of the plan in order to be eligible.

The CRJTC is allowed in addition to other job tax credits allowed by Tennessee statute.  Also, the CRJTC can be used against both the Tennessee franchise and excise taxes, but is limited to 50 percent of the combined franchise and excise tax liability before any credit is taken.  Unused credit may be carried forward for 15 years.

The Act limits the aggregate amount of CRJTC available to all taxpayers to $12,500,000 per year.   The credit does not have a sunset provision.

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.






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