Empire Zone Wage Tax Credit
Monday, June 15, 2009 at 7:05AM New York always seems to put its own spin on everything, from fashion to pizza. So why should business incentives be any different? Wanting to stand out from the myriad Enterprise Zone programs, the Empire State created the....
The Empire Zone program offers a number of incentives, from real property tax abatements to sales tax exemptions to income tax reductions. Like most other "EZ" programs, the centerpiece of the program is the Wage Tax Credit. Businesses located within an Empire Zone can qualify for a wage tax credit for qualifying full-time employees. This tax credit may also be applied against the franchise tax on business corporations, banking corporations, and insurance corporations.
There are two tiers for the tax credit amount:
1) Up to $1,500 for each full-time employee who received empire zone wages for over half the taxable year, or
2) Up to $3,000 for employees that fall into certain target groups and receive an hourly wage that is at least 135% of the minimum wage.
This credit is allowed for up to five consecutive years.
In order to receive this credit, companies must be located within an Empire Zone and then apply for "certification" through the local zone coordinator.
While New York has had great success with the Empire Zone program, the economic downturn and subsequent budgetary constraints forced the state to close 10 of its EZs in May. The program is scheduled to sunset next year, so lawmakers are debating its survival. In other words, get in while the gettin's good!
EZs, New York, non-refundable, tax credit
Reader Comments (1)
One of the most important aspects of the program that many people don't realize is that it is "Proactively Retroactive". In other words, when you get certified, you get credits for all job creation that took place from the date the Zone was created. So, if a company had 100 employees when the Zone was created and gets certifed when they have 150 employees, they immediately get to claim credits on 50 employees going forward. Many companies want retroactive, refundable credits but this is the next best thing.