Federal & State
Current eligibility information is available for companies interested in accessing Federal and State tax incentives associated with employees in designated categories. When a company enrolls in the Tax Credit Program, the company’s information is processed to receive the tax credits for which the company is eligible through the:
Federal Empowerment Zone Credit
This is a tax credit for employers that operate in an empowerment zone. The program has been extended through December 31, 2020. Under this credit, an employer may claim a 20-percent credit on up to the first $15,000 of wages paid to certain employees. For more information go to: Form 8844(PDF) Instructions for Form 8844 (PDF)
Renewal Community Employment Credit
The Renewal Community Employment Credit is an incentive to businesses that are located in an renewal community (RC) to hire and retain employees who also live in the RC. Businesses are eligible for a wage credit of up to $1,500 per eligible employee.
Renewal Communities are distressed urban and rural areas nationwide that are in need of revitalization. The Federal government assists these targeted communities by providing tax incentives, grants, loans and technical assistance.
The credit is 15% of the qualified wages paid during a calendar year, up to $10,000 per employee. Both newly hired and current employees are eligible. The credit is renewable each year, and there is no limit to the number of employees a business can claim, as long as each employee lives in the RC. Both full time and part time employees may qualify.
Claiming the credit: The Renewal Community Employment Credit is claimed on a company’s federal tax return using IRS Form 8844 (PDF), Empowerment Zone Employment Credit.
Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.
The Work Opportunity Tax Credit (WOTC) is authorized until December 31, 2020 (Section 143 of Division Q of P.L.116-94 — Further Consolidated Appropriation Act, 2020). The WOTC fact sheet offers an overview of key information about the tax credit.
For additional information about WOTC and eligible targeted groups, see https://www.irs.gov/businesses/small-businesses-self-employed/work-opportunity-tax-credit .
City of Philadelphia Programs
With regards to the Cities Tax Incentives (Not State or Federal) we have the ones below still in effect.
The Jobs Creation Tax Credit– This program, administered through the Philadelphia Department of Revenue is a $5,000 tax credit for each new full-time job created in Philadelphia. The credit is applied against the Business Income and Receipts Tax (BIRT). It must be applied for in the same quarter in which the jobs are being created. Applying businesses must also show that they are able to create 25 new jobs or increase full-time positions by 20% in the five-year period after receiving the credit.
Fair Chance Hiring Initiative- the City of Philadelphia has a commitment to diversity and inclusion. As part of that, the Office of Workforce Development has created the Fair Chance Hiring Initiative. This program reimburses local employers who hire formerly incarcerated individuals, see Application
If you have any questions regarding these programs or require assistance in filing, MAP can help you. Contact us at 215.948.9285 and ask for Terri Taylor or email at: [email protected]