Renewal Community Tax Credits are the tax credits earned by the employer for hiring a certain type of employees. The credits earned, help the employer in the reduction of taxes payable to the government for conducting the business. They are help in the promotion of projects of historic renovation, workforce development, reasonable child care facilities. They also come handy in the promotion of redevelopment and growth opportunities in a specific area.
Renewal Community Tax Credits provides the employer an incentive to earn tax credits by employing the individuals who are resident of a Renewal Community and also working within that Renewal Community. The tax credit which could be earned equals 15% of the initial $10,000 paid as wages in a year if the individual employed is living and providing services within the region included in the Renewal Services. There are 40 Rural and Urban Renewal Communities designated by the Department of Housing and Urban Development.
Only those employees qualify for Renewal Community Tax Credits who performs approximately all of his/her services for a particular business within the region designated as renewal community. While he/she performs those services within the region, his main home should also be within the region of the same renewal community. Any of the above stated two conditions, if missing will disqualify the employee immediately. But there is a bit of relaxation that the employees working full-time or part-time may qualify.
There are number of tax incentives available under the Renewal Community program. Some of them are good for a labor-intensive business while some are beneficial for a capital-intensive business where as others are better suited to small businesses. Six chief incentives can be sought after, which are available under the Renewal Community Programs are: