Businesses in the District are entitled to numerous employer tax incentives - many of which are not available anywhere else in the United States. The list below represents just a sample of the tax breaks your business may utilize in DC.
WORK OPPORTUNITY TAX CREDIT (WOTC) Employers may claim the Work Opportunity Tax Credit (WOTC) by hiring individuals from certain targeted groups, including: low income, vocational rehabilitation referrals, former AFDC recipients, veterans, ex-felons, food stamp recipients, summer youth employees and SSI (Supplemental Security income) recipients.
Employers may claim a maximum credit of 25 percent of the first $6,000 in wages paid to an individual who works at least 120 hours for the employer; an increased credit of 40 percent on up to $6,000 in wages is available on behalf of an employee that works at least 400 hours for the employer.
Tax benefits are described more fully in IRS Publication 954: Employment Tax Credits which is available at: www.irs.ustreas.gov or by calling (202) 622-6080.
EARNED INCOME TAX CREDIT CAMPIAGN 2003 (EITC) The Earned Income Tax Credit (EIC) is a tax benefit for working individuals with low earnings. Eligibility is limited to workers with a yearly income of $32,000 with two or more children, workers with one child with a yearly earning below $28,000 in their care and employees on their own with a yearly earning of $10,700.
For more information on the tax related campaign visit website: www.dcfpi.org/eic2003.
TAX EXEMPT BOND FINANCING (Empowerment Zones and Enterprise Communities)
Each business that meets the requirements for a "qualified Enterprise Zone business" is eligible for up to $15 million worth of tax-exempt, "EZ Bonds" to finance depreciable, tangible property, including buildings, equipment, and furnishings used in the qualified business.
WELFARE-TO-WORK TAX CREDIT (WtW) An employer with facilities located anywhere in the District that hires a "long-term family assistance recipient (AFDC)" will be eligible for a Welfare-To-Work Tax Credit of up to $8,500 over a two-year period. A long-term family assistance recipient includes a member of a family receiving federal family assistance payments for at least 18 consecutive months prior to hiring, or for at least 18 months (whether or not consecutive) after August 5, 1997, or who is no longer eligible for family assistance due to state or federal limitations on the maximum eligibility period if the person is hired by the employer within two years of the termination date.
Employers can take a credit of 35 percent of wages paid to the employee the first year of employment and a credit of 50 percent of wages paid during the second year of employment. The employee must have worked for the employer for a minimum of 400 hours before the credit may be claimed. The credit is available regardless of where the business is located or where the employee resides.
Tax benefits are described more fully in IRS Publication 954: Employment Tax Credits which is available at: www.irs.ustreas.gov or by calling (202) 622-6080.
EMPOWERMENT ZONE EMPLOYMENT TAX CREDIT Employers who hire individuals who both live and work anywhere in the District of Columbia may claim a maximum of $3,000 per qualified zone employee each year. A qualified zone employee is any full or part-time employee who meets both of the following tests:
The employee performs substantially all of his or her services for the business within an empowerment zone in the trade or business.
While performing those services, the employee has his or her main home within the District of Columbia for services performed within the DC Zone.
For more information about the empowerment zone employment credit see IRS Publication 954: Employment Tax Credits, Form 8844 which is available at: www.irs.ustreas.gov or by calling (202) 622-6080.
ARCHITECTURAL/TRANSPORTATION TAX DEDUCTION IR Code Section 190, Barrier Removal
Businesses may take an annual deduction of up to $15,000 for expenses incurred to remove physical, structural and transportation barriers for people with disabilities. More information is available in IRS Publication 907 and 535 For more information, go to www.irs.ustreas.gov.
SMALL BUSINESS TAX CREDIT IR Code Section 44, Disabled Access Credit
Small businesses (that earned $1 million or less in the previous year or had 30 or fewer full-time employees) may take an annual tax credit for making their businesses accessible to people with disabilities. The credit is 50% of expenditures over $250, but not to exceed $10,250, for a maximum benefit of $5,000.
Businesses can claim the Disabled Access Credit on IRS Form 8826 which is available at www.irs.ustreas.gov.
WASHINGTON REGION ACCESS TO JOBS PROGRAM Washington Metropolitan Area Transit Authority
This program offers employment transportation services to low-income people and welfare recipients throughout the Washington DC region.
CHILD CARE DC residents may qualify for financial assistance or services to help meet their child care needs through the Office of Early Childhood Development.
For additional information on business involvement in early care and education, contact (202) 727-1839 or (202) 727-0284.
ALIEN LABOR CERTIFICATION Certain aliens may obtain a visa to enter the United States and engage in permanent employment only if certified that:
Local U.S. workers are not available, willing and qualified for those jobs.
The wages and working conditions will not affect U.S. employees in similar employment.
Employers may seek Alien Labor Certification by submitting Form ETA-750, Parts A & B: Application for Alien Employment Certification. For additional information contact (202) 698-6002 or visit www.does.gov.
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