Businesses located in an Enterprise Zone may reduce their state income tax by a percentage of the wages paid to one or more qualified employees. The business has the potential to earn $37,440 or more in state tax credits per qualified employee over a five-year period. There are no residency requirements; however, at least 50% of the employee's work must be performed inside the boundaries of an Enterprise Zone.

Our clients are amazed to find that 10% to 30% of their new hires are eligible. The company can receive tax credits for up to 5 years in the amount shown below:

Period of Employment Credit allowed on Qualified wages paid:

• 1st 12 months 50%
• 2nd 12 months 40%
• 3rd 12 months 30%
• 4th 12 months 20%
• 5th 12 months 10%

Qualified employees generally include veterans, students, individuals who have been laid-off or were unemployed, and low wage earners. They may also reside within a designated area of the city know as a TEA - Targeted Employment Area or meet one of the other qualifying criteria. Both full and part-time employees qualify.

*The credit is based on the lesser of the actual hourly wages paid or 150% of the minimum hourly wage (currently 150% = $12.00 per hour).