TAX CREDIT ELIGIBLITY WIDENED

Tax credit eligibility widened

Cara Baruzzi,

Register Staff 06/05/2007 

NEW HAVEN — A federal tax credit available to city businesses that hire Empowerment Zone residents has been expanded to make more residents eligible. The Work Opportunity Tax Credit is now worth up to $2,400 for each qualifying individual between 18 and 39 years old that businesses hire, according to Thomas Ficklin, chief information officer of Empower New Haven Inc., which administers New Haven's Empowerment Zone. Previously, the tax credit was up to $2,400 for each qualifying hire between the ages of 18 and 24.

The age range was recently expanded as part of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery and Iraq Accountability Appropriations Act that President Bush signed into law May 25, Ficklin said.

That law expanded the period in which employers may claim the credit through 2011. Employers do not have to be located within the Empowerment Zone.

"We urge business to explore this economic opportunity," said Empower New Haven President Althea Marshall Richardson.

The credit gives businesses an incentive to hire workers from targeted groups that have a particularly high unemployment rate or other special employment needs, according to the Internal Revenue Service.

In New Haven, the Empowerment Zone encompasses parts of the Dixwell, Dwight, Fair Haven, Hill, Newhallville and West Rock neighborhoods, as well as several commercial areas including downtown and Long Wharf.

Empower New Haven, a nonprofit organization, manages U.S. Department of Housing and Urban Development grants to revive impoverished areas in those neighborhoods.

Businesses seeking more information about the Work Opportunity Tax Credit, and those inquiring about whether current employees qualify, should contact Empower New Haven, Ficklin said.

Many business owners may not be aware they are eligible to receive the credit, said Anthony Rescigno, president of the Greater New Haven Chamber of Commerce, which is working to promote the program to its member businesses.

"Whenever you improve the opportunity to have more participants in a program like this, it has a positive effect," Rescigno said.

The federal law that expanded the Work Opportunity Tax Credit also increased the maximum Section 179 deduction, which pertains to business equipment, from $400,000 to $500,000, and increased the expense deduction on tangible personal property for small businesses from $100,000 to $125,000.

Businesses located in the Empowerment Zone are still eligible to increase their Section 179 expense deduction by an additional $35,000 as they previously were, according to Empower New Haven.    

Back to News