Boston Career Link's mission is to provide state-of-the-art services that successfully connect the businesses and job seekers of Greater Boston. To help facilitate this goal, the federal government has made both wage and other business tax credits available to local employers.

A summary of the available tax credits follows with links to helpful websites and is provided for informational purposes and should not be regarded as advice concerning eligibility for or as a basis for computing any of the tax credits. Consult with a tax advisor or with the IRS.

~ Empowerment Zone Employment Wage Credit;
~ Work Opportunity Tax Credit;
~ Welfare to Work Wage Credit;
~ Accelerated Depreciation on Purchase of Equipment and Machinery;
~ Brownfield Expensing;
~ Reduced Capital Gains Taxes;
~ Tax-Exempt Bond Financing;
~ Qualified Zone Academy Bonds-QZABs;
~ Low-Income Housing Tax Credit-LIHTC;
~ Indian Employment Credit.

Empowerment Zone Employment Wage Credit
Businesses located in the Empowerment Zone can claim up to $3,000 annually for each Zone resident who has been employed for at least 90 days. Businesses can claim this credit for both new or current employees. To claim the maximum credit, businesses must spend at least $15,000 on qualified wages and certain training and educational expenses paid or incurred on behalf of a Qualified Zone Employee. For those employees earning less than $15,000, businesses can claim a 20% credit on the annual employment expense. Click here to view IRS Form 8844 & Instructions and click here to determine if a particular address is in the Empowerment Zone.

Quick Calculation:

Work Opportunity Tax Credit
This is a wage credit for up to $2,400 against Federal taxes for businesses who hire Zone residents with special employment needs, including high-risk youth, veterans, ex-felons, vocational rehabilitation referrals, summer youth employees, food stamp recipients, TAFDC/TANF recipients, or SSI recipients. Businesses do not have to be located in the Zone to qualify for this credit which is available for any full- or part-time employee who works at least 120 hours for the business. IRS Form 8850 must be forwarded to the Commonwealth’s Department of Employment and Training within 21 days of the employee starting work. Click here to view IRS Publication 954, IRS Form 5884 & Instructions and for Form 8850 & Instructions. View the 1-page Guide for Employers. For additional information and assistance, visit Massachusetts Dept. of Employment and Training.

Quick Calculation:

Welfare to Work Wage Credit
This is a federal tax credit of up to $8,500 over two years for each new employee who has received family assistance or welfare for 18 months or more. Businesses seeking to take advantage of this credit are encouraged to work closely with the Commonwealth’s Department of Employment and Training for assistance in hiring processes. New hires must work at least 400 hours or 180 days (part-time or full-time) in order for the business to claim the credit. Click here to view IRS Publication 954, IRS Form 8861 & Instructions and for Form 8850 & Instructions. View the 1-page Guide for Employers. For further information or assistance also visit Massachusetts Dept. of Employment and Training.

Quick Calculation:

Accelerated Depreciation on Purchase of Equipment and Machinery
Empowerment Zone businesses can claim increased Section 179 deduction (up to $35,000) if they qualify as Enterprise Zone Businesses. This deduction can be claimed on certain depreciable property such as equipment and machinery for those businesses that: use tangible and intangible property in the Zone; have at least 35% of their employees live in the Zone; and perform most of their services in the Zone. Click here to view IRS Publication 954 and IRS Publication 946 and Form 4562 & Instructions. Click here to determine if a particular address is in the Empowerment Zone.

Quick Calculation:

Brownfield Expensing
Businesses can elect to deduct qualified cleanup costs of hazardous substances in certain targeted areas in the tax year a business pays or incurs the costs. This expensing includes costs incurred after August 5, 1997 and before January 1, 2004. See Section 198 of the Internal Revenue Code. In addition, contact the Commonwealth of Massachusetts’ Brownfield assistance office. Boston Connects, Inc. through a grant from the U.S. Environmental Protection Agency trains Zone residents in certain elements of environmental clean up through the Brownfields Remediation Program. Contact us for further information on the program or to hire graduates.

Reduced Capital Gains Taxes
Through this tax credit, businesses can exclude 60% of the gain on the sale of stock of an Empowerment Zone business held for more than 5 years. The gain on the sale of an Empowerment Zone Asset held more that one year is not recognized if a replacement is acquired in 60 days. This tax credit is applicable to purchases made after December 21, 2000 and before January 1, 2010. Click here to view IRS Publication 550.

Quick Calculation:

Tax-Exempt Bond Financing
City government can issue bonds to make low interest loans to businesses located in the Zone for financing properties in the Zone. Qualifying businesses must have a good credit rating or a letter-of-credit bank, and the project to be financed must be at least $2,000,000. At least 95% of the net proceeds from the bond issue must be used to finance the development. Recipients of bond financing must fill 35% of newly created jobs with Zone residents. Contact BCI and the Boston Redevelopment Authority for further information.

Qualified Zone Academy Bonds-QZABs
State or local governments can issue bonds at 0% interest to finance public school programs with private business partnerships. Businesses must contribute money, equipment, or services equal to 10% of loan for academy program. The Federal Government pays interest in the form of tax credit to banks, insurance and certain financial corporations that hold bonds. Private businesses receive charitable deductions for contributions in materials, teacher training, rehabilitation, or equipment for programs that prepare students for jobs. Schools must be in the Zone or have 35% of students eligible for free or reduced-price lunch. Click here to view IRS Form 8860 & Instructions. The credit is allocated through the Massachusetts Department of Education. For more information, click here.

Low-Income Housing Tax Credit-LIHTC
Available over a 10-year period to the tax owners of rental projects who set aside a specified percentage of units for low-income persons for a minimum of 15 years. The project owner must receive an allocation of tax credits to qualify for this incentive. Information on the LIHTC can be obtained from IRS Publication & Form 8586 and from the National Council of State Housing Agencies.

Indian Employment Credit
Employees of American Indians who are qualified employees use IRS Form 8845 & Instructions to claim the Indian Employment Credit.

Boston Career Link is also invested in training Zone residents. If your business is interested in hiring Empowerment Zone residents, contact the Manager of Business Services.