TAX NEWS - April 2009

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

The Florida Enterprise Zone Program offers various tax incentives to businesses located within the designated enterprise zones. In addition, local governments may also offer their own incentives.

Allows a business located within a Rural Enterprise Zone to take a corporate income tax credit for 30 or 45 percent of wages paid to new employees who reside within a Rural County.  To be eligible, a business must create at least one new job. The Corporate Tax Credit cannot be used in conjunction with the Sales Tax Credit.


Forms

EZ Jobs Credit Certificate 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 30% 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 credit is 45%.


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.
- This tax credit is not available if the Credit Against Sales Tax for Job Creation is taken.


Eligibility Requirements

Business

- Must be located within a Rural Enterprise Zone. (See s. 290.004(8), F.S. for Rural Enterprise Zone definition.)
- Must not be taking E.Z. Jobs Tax Credit against sales tax.


Employee

- Must work in a new job in an Enterprise Zone and reside within a rural county. (See s. 288.106(1)( r ), F.S. for more details.)
- 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 30% of monthly wages paid to new employees.
- If this percentage is 20% or more the tax credit will be 45% of monthly wages paid to new employees.