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taxmap/pubs/p954-000.htm#TXMP01c80214
Publication 954

Tax Incentives for Distressed Communities


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taxmap/pubs/p954-000.htm#TXMP42584c41Introduction

This publication is for business owners who want to find out whether they qualify for certain tax incentives. These incentives are intended to help empowerment zones, enterprise communities, renewal communities, and other distressed communities. A distressed community is any area whose poverty rate or other conditions cause any of these tax incentives to apply. The requirements for each tax incentive are different. The following paragraphs may guide you in using this publication.
To find out whether your area has been designated an empowerment zone read Designated Zones on page 3. To find out whether your area has been designated a renewal community, read Designated Renewal Communities on page 8. To find out whether your area has been designated an enterprise community, read Enterprise Communities on page 13.
If you know that your area has been designated as an empowerment zone, enterprise community, or renewal community, skip the sections on designated zones and communities and begin by reading the first few paragraphs of each of the other sections of the publication. Then, read the details of the sections that apply to you.
If you know that your area has not been designated as a zone or community, you should still read the first few paragraphs of each section. Some of these incentives are available in distressed communities that have not been designated as empowerment zones, enterprise communities, or renewal communities. Read the details of the sections that apply to you.
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Comments and suggestions.


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We welcome your comments about this publication and your suggestions for future editions.
You can email us at *taxforms@irs.gov. Please put "Publications Comment" on the subject line.
You can write to us at the following address:

 
Internal Revenue Service  
Business Forms and Publications Branch  
SE:W:CAR:MP:T:B  
1111 Constitution Ave. NW  
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.

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Useful items

You may want to see:


Publication
 946 How To Depreciate Property
Form (and Instructions)
 3800: General Business Credit
 5884: Work Opportunity Credit
 8844: Empowerment Zone and Renewal  
Community Employment Credit

 8845: Indian Employment Credit
 8850: Pre-Screening Notice and Certification  
Request for the Work Opportunity and Welfare-to-Work Credits

 8860: Qualified Zone Academy Bond Credit
 8861: Welfare-to-Work Credit
 8874: New Markets Credit
 8884: New York Liberty Zone Business  
Employee Credit

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Table 1. Tax Incentives for Distressed Communities

Type of Benefit Empowerment Zones
(EZs)
Enterprise Communities
(ECs)
Renewal Communities
(RCs)
Credits   
EZ Employment CreditX  
RC Employment Credit  X
Work Opportunity CreditXXX
Welfare-to-Work CreditXXX
Indian Employment CreditXXX
New Markets CreditXXX
Deductions   
Increased Section 179 DeductionX X
Commercial Revitalization Deduction  X
Depreciation of Property Used on Indian ReservationsXXX
Bond Financing   
Enterprise Zone Facility BondsXX 
Qualified Zone Academy Bonds (QZABs)XXX
Capital Gains   
Capital Gain Exclusion for RC and DC Zone Assets  X *
Rollover of Gain from Sale of EZ AssetsX  
Increased Exclusion of Gain From Qualified Small Business StockX  
* Also applicable to District of Columbia Enterprise Zone.