Renewal Community Tax Incentives

For businesses located within a Renewal Community boundary certain Federal tax incentives to hire local residents and to expand or improve their operations are available.

Davie Kaplan Chapman & Braverman, P.C. can assist you in understanding these Renewal Community benefits and determine which items your business may be eligible for:

• Wage credit. A maximum credit of $1,500 per year credit against Federal taxes for all existing employees and every new hire living in the Renewal Community.

• Work opportunity tax credit. A credit of up to $2,400 against Federal taxes for businesses for each new hire from groups who live in a Renewal Community and that have high unemployment rates or other special employment needs. Businesses do not have to be located in the Renewal Community to qualify for this credit.

• Commercial revitalization deduction. Businesses that construct or rehabilitate commercial property in Renewal Communities can deduct a portion of the costs of acquisition and rehabilitation over a shorter period of time than permitted under standard depreciation rules. A deduction of either one-half of qualified revitalization expenditures in the first year a building is placed in service or all of the qualified revitalization expenditures over a 10 year period is available if an allocation from New York State has been made to the project.

• Zero-percent capital gains. If a Renewal Community business asset acquired between January 1, 2002 and December 31, 2009, is held for a minimum of five years no capital gain will have to be included in gross income when the asset is sold. The business must meet the definition of a “Renewal Community Business” to qualify for this incentive.

Our approach is to look at each business for available tax reduction opportunities such as those from the Renewal Community program.

For more information, contact Jeffrey M. Wexler.