Empowerment Zone Employment Credit ERROR MSGThe empowerment zone employment credit provides businesses with anincentive to hire individuals who both live and work in an empowermentzone. (Individuals who work in the DC Zone may live anywhere in theDistrict of Columbia.) You can claim the credit if you pay or incur"qualified zone wages" to a "qualified zone employee." Thecredit can be as much as $3,000 per qualified zone employee each year. Caution: alberghi b&b OradeaYou cannot claim this credit for a business you operate in one ofthe 15 urban or 5 rural zones whose designation was effective December31, 1998. Qualified zone employee.A qualified zone employee is any employee who meets both of thefollowing tests. The employee performs substantially all of his or herservices for you within an empowerment zone in your trade orbusiness. While performing those services, the employee has his or hermain home within that empowerment zone (or within the District ofColumbia, for services performed within the DC Zone). Both full-time and part-time employees may qualify. Nonqualified employees.The following individuals are not qualified zone employees. An individual you employ for less than 90 days. However,this 90-day requirement does not apply in either of the followingsituations. You terminate the employee because of misconduct asdetermined under the state unemployment compensation law thatapplies. The employee becomes disabled before the 90th day. However,if the disability ends before the 90th day, you must offer to reemploythe former employee. Certain related taxpayers. Certain dependents. Any 5% owner. An individual you employ at any: Private or commercial golf course, Country club, Massage parlor, Hot tub facility, Suntan facility, Racetrack, or other facility used for gambling, or Store whose principal business is the sale of alcoholicbeverages for off-premise consumption. Any individual you employ in a farming trade or business if,at the close of the tax year, the sum of the following amounts is morethan $500,000. The larger of the unadjusted bases or fair market value ofthe farm assets you own. The value of the farm assets you lease. Qualified zone wages.Qualified zone wages are any wages you pay or incur for servicesperformed by an employee while the employee is a qualified zoneemployee (defined earlier). Wages are generally defined as those wagessubject to the Federal Unemployment Tax Act (FUTA) without regard tothe FUTA dollar limit. five star hotel in ValkenburgAlso treat as qualified zone wages certain training and educationexpenses you pay or incur on behalf of a qualified zone employee. The total amount of qualified zone wages (including training andeducation expenses treated as qualified zone wages) you can use tofigure the credit cannot be more than $15,000 for each employee eachcalendar year. ERROR MSGEffect of welfare-to-work or work opportunity credit.Qualified zone wages do not include any amount you take intoaccount in figuring the welfare-to-work credit or the work opportunitycredit. In addition, reduce the $15,000 maximum qualified zone wagesfor each qualified zone employee by the amount of wages you use tofigure either of those credits for that employee. Amount of credit.The following tables show the rate you apply to the qualified zonewages you pay or incur during each calendar year listed. The tablesalso show the maximum credit you can claim each year for eachqualified zone employee. Table 1. Rate and Maximum Credit for Zone Designations Effective December 21, 1994 Maximum Qualified Maximum Year Rate Zone Wages Credit 1994 - 2001 20% $15,000 $3,000 2002 15% 15,000 2,250 2003 10% 15,000 1,500 2004 5% 15,000 750 For the District of Columbia Enterprise Zone, the rate is 20% andthe maximum credit is $3,000 until the end of 2002. Table 2. Rate and Maximum Credit for the Zones in Cleveland and Los Angeles Maximum Qualified Maximum Year Rate Zone Wages Credit 2000 - 2004 20% $15,000 $3,000 2005 15% 15,000 2,250 2006 10% 15,000 1,500 2007 5% 15,000 750 Claiming the credit.Use Form 8844, Dubrovnik hôtelsEmpowerment Zone Employment Credit,to claim this credit. Although the empowerment zone employmentcredit is a component of the general business credit, a special taxliability limit applies to this credit. Therefore, you figure thecredit separately and never carry it to Form 3800, GeneralBusiness Credit. Effect on salary and wage deduction.In general, you must reduce the deduction on your income tax returnfor salaries and wages and certain education and training costs by theamount of your empowerment zone employment credit. More information.For more information about the empowerment zone employment credit,see Form 8844.