What is it?
The Enterprise Zone Hiring Credit lets you claim a credit against your State taxes for each qualifying employee you hire. If your business is located in an Enterprise Zone, you can claim up to 50% of your employee’s wages in year one, 40% in year two, 30% in year three, and so on until year five, up to a maximum of $31,605.
Where are the Enterprise Zones?
California has a large number of Enterprise Zones that include communities in Anaheim, China Town, East Los Angeles, Fresno, Huntington Park, Korea Town, Los Angeles, Long Beach, Lynwood, Oakland, North Hollywood, Pasadena, Riverside, San Francisco, San Jose, Santa Ana, South Gate, and among many others.
Who counts as a ‘qualified employee’?
Qualified employees must live in a designated Targeted Employment Area, where most people have low or moderate incomes, or meet the eligibility requirements for one of several specified Federal job training programs.
How can you benefit?
To enjoy all of the support that you are entitled to under the Enterprise Zone tax incentives program, it is important to act now. Universal Tax Services will tailor a strategy to help you maximize the tax credits you can claim up to the expiry date of your Enterprise Zone. Each Zone has its own expiry date, some as late as 2027 but others within this year.
In addition, since California’s Statute of Limitation allows you to amend your tax return up to four years after the return’s due date, we can also review your past returns to recapture hiring tax credit opportunities that you previously missed. We have helped clients claim substantial cash refunds, to which the California Franchise Tax Board (FTB) also adds a generous interest payment.
The tax credits you earn under this program can be carried forward indefinitely, as long as you operate your business within one of the Californian Enterprise Zones. That’s why many of our Enterprise Zone clients will be tax free on the State level for many years. Even those who decide to sell their business can continue to benefit, as we can help them to use their remaining credits to offset their capital gains tax liability.
|“Caring for my customers and my community is important to me. So it makes sense that I use the tax credits, which Universal Tax Services discovered I could claim, to make my business stronger. Since my business is doing well, I can offer even better service to my customers, provide jobs in my neighborhood, and contribute to the continuing development of South Gate.” Sylvia Masushige, Owner, Tweedy Pharmacy, South Gate; C.F.O., South Gate Chamber of Commerce