TAX NEWS - April 2009

Jobs Tax Credit (Corporate Income Tax):
Florida Urban Enterprise Zones

The Florida Enterprise Zone Program offers various tax incentives to businesses located within the designated enterprise zones.

Florida Urban Enterprise Zones Corporate Income Tax Jobs Tax Credit allows a business located within an Urban Enterprise Zone to take a corporate income tax credit for 20 or 30 percent of wages paid to new employees who reside within an enterprise zone. The Corporate Tax Credit cannot be used in conjunction with the Sales Tax Credit.


Forms for Tax Credit

Corporate Income Tax Form F-1156Z


Purpose

Allows business located in a Florida Enterprise Zone a corporate income tax credit for the wages paid to new employees.


Advantages

- Provides a tax credit of 20% of wages paid to new eligible employees who are residents of Florida Enterprise Zone. 
- If more than 20% of the employees are residents of a Florida Enterprise Zone, the tax credit is 30%.


Limitations

- Firms must earn more than $5,000 to take advantage of the credit.
- The Federal tax burden may increase sine state tax liability is reduced.
- That amount of the credit must be added back to Florida taxable income.
- Tax credit is not available if the Credit Against Sales Tax for Job Creation is taken.


Tax Credit Eligibility Requirements

Business

- Must be located within a an Enterprise Zone.
- Must not be taking E.Z. Jobs Tax Credit against sales tax.


Employee

- Must reside and work in a Florida Enterprise Zone.
- Welfare Transition Program participants may reside anywhere, but must work within a zone.
- Must work at least 36 hours per week (no part-time employees).
- Must be employed for three consecutive months.
- Employees leased from an employee leasing company must continuously be leased to an employer for more than 6 months.
- Previous employees must not have been employed by the hiring business in the preceding 12 months. 
- Tax credits shall be allowed for up to 24 months per new employee.
- Unused tax credit may be carried forward up to 5 years.


Calculations

- Number of permanent, full-time zone resident employees / total number of permanent, full-time zone and non-zone resident employees
- If this percentage is less than 20% the tax credit will be 20% of monthly wages paid to new employee.
- If this percentage is 20% or more the tax credit will be 30% of monthly wages paid to new employee.