§1396 — Empowerment zone employment credit
39 cases·3 followed·3 overruled·33 cited—8% support
Statute Text — 26 U.S.C. §1396
For purposes of section 38, the amount of the empowerment zone employment credit determined under this section with respect to any employer for any taxable year is the applicable percentage of the qualified zone wages paid or incurred during the calendar year which ends with or within such taxable year.
For purposes of this section, the applicable percentage is 20 percent.
For purposes of this section, the term “qualified zone wages” means any wages paid or incurred by an employer for services performed by an employee while such employee is a qualified zone employee.
With respect to each qualified zone employee, the amount of qualified zone wages which may be taken into account for a calendar year shall not exceed $15,000.
The term “qualified zone wages” shall not include wages taken into account in determining the credit under section 51.
The $15,000 amount in paragraph (2) shall be reduced for any calendar year by the amount of wages paid or incurred during such year which are taken into account in determining the credit under section 51.
For purposes of this section—
Except as otherwise provided in this subsection, the term “qualified zone employee” means, with respect to any period, any employee of an employer if—
substantially all of the services performed during such period by such employee for such employer are performed within an empowerment zone in a trade or business of the employer, and
the principal place of abode of such employee while performing such services is within such empowerment zone.
The term “qualified zone employee” shall not include—
any individual described in subparagraph (A), (B), or (C) of section 51(i)(1),
any 5-percent owner (as defined in section 416(i)(1)(B)),
any individual employed by the employer for less than 90 days,
any individual employed by the employer at any facility described in section 144(c)(6)(B), and
any individual employed by the employer in a trade or business the principal activity of which is farming (within the meaning of subparagraph (A) or (B) of section 2032A(e)(5)), but only if, as of the close of the taxable year, the sum of—
the aggregate unadjusted bases (or, if greater, the fair market value) of the assets owned by the employer which are used in such a trade or business, and
the aggregate value of assets leased by the employer which are used in such a trade or business (as determined under regulations prescribed by the Secretary),
exceeds $500,000.
Paragraph (2)(C) shall not apply to—
a termination of employment of an individual who before the close of the period referred to in paragraph (2)(C) becomes disabled to perform the services of such employment unless such disability is removed before the close of such period and the taxpayer fails to offer reemployment to such individual, or
a termination of employment of an individual if it is determined under the applicable State unemployment compensation law that the termination was due to the misconduct of such individual.
For purposes of paragraph (2)(C), the employment relationship between the taxpayer and an employee shall not be treated as terminated—
by a transaction to which section 381(a) applies if the employee continues to be employed by the acquiring corporation, or
by reason of a mere change in the form of conducting the trade or business of the taxpayer if the employee continues to be employed in such trade or business and the taxpayer retains a substantial interest in such trade or business.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.1396-1 Qualified zone employees
- Treas. Reg. §Treas. Reg. §1.1396-1(a) In general.
- Treas. Reg. §Treas. Reg. §1.1396-1(b) Period for applying location-of-services requirement.
- Treas. Reg. §Treas. Reg. §1.1396-1(c) Effective date.
39 Citing Cases
le to the nonmoving party. Bond v. Commissioner, 100 T.C. 32, 36 (1993). II. General Business Credits Section 38 permits taxpayers to claim a variety of business credits against federal income tax. Among those credits are the section 51 WOTC and the section 1396 EZEC. Barrett claimed both credits with respect to its clients’ worksite employees for the years in issue. A. The Work Opportunity Tax Credit The WOTC provides that employers may receive a credit equal to 40% of qualified first-year wage
1396n(c) (2012). 3We are not bound by the parties' stipulation as to matters oflaw. Greene v. Commissioner, 85 T.C. 1024, 1026 n.3 (1985). - 4 - refundable portion ofpetitioners' child tax credit. As set forth in his notice of deficiency, respondent disallowed petitioners' claimed EITC and ACTC. To qualify for an EITC or an ACTC petitioners m
On January 18, 2006, the articles of incorporation were amended to state the purpose of the corporation as follows : (1) This non-profit corporation is- organized exclusively for charitable purposes within the meaning of section 501(c)(3) * * *, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) * * * .
Baxter designed the Special Needs Trust to comply with section 1396p(d)(4)(A) of the Medicaid Payback Trust Act, which had just been enacted in 1993.
§ 1396a(a)(17)(B): “taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant,” Schweiker v. Gray Panthers, 453 U.S. 34, 43-44 (1981); ! Communications Act of 1934, § 200: “The Commission may, in its discretion, prescribe the forms of any and all acc
1396a(k) (2) (1988), such that the trust estate would be deemed "available" to the child and would eliminate his eligibility for health care benefits from the State. Id. As pertinent there, the trust would meet the statutory definition of qualifying only if the child were considered to have established or created the trust. Id. at 565-566. On
§ 1396a(a)(17)(B): “taking into account only such income and resources as are, as determined in accordance with standards prescribed by the Secretary, available to the applicant,” Schweiker v. Gray Panthers, 453 U.S. 34, 43-44 (1981); • Communications Act of 1934, § 200: “The Commission may, in its discretion, prescribe the forms of any and all acc
(1994), authorizes the use of Federal funds (in conjunction with State funds) to supplement State-administered medical assistance plans for families with dependent children, and aged, blind, and disabled individuals whose income and resources are insufficient to meet the costs of necessary medical services. - 26 - F. Enrollment P