[Biff-1955-Tannen]

Question 1297 explanation says that “To qualify for either the employment credit or the increased Section 179 deduction, a business must be located in the zone and engaged in an active trade or business within the zone and at least 35% of its employees must live in the zone. Certain businesses are not eligible, including golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, racetrack, gambling, liquor stores, and farms with owned or leased assets over $25,000”

Question 1293 says “The empowerment zone employment credit is available to all employers (not just those classified as an enterprise zone business) and is equal to 20% of the first $15,000 of qualified wages paid to each employee who is a resident of an empowerment zone and who performs substantially all employment services within the zone in a trade or business of the employer.”

1293 says that ALL employers are eligible, while 1297 says that there are exclusions. Are these questions referring to different credits?

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[wcn825]

i was confused with this too. but the exclusions apply to question 1293 as well. credit is available except for those businesses.

[Anonymous]

I'm not to this section of REG review so there could be something else coming into play here (e.g. could one be talking about an enterprise zone credit and the other is discussing empowerment zone credit?), but assuming the questions and explanations are talking about the same credit, the wording is what jumped out to me in reading your question.

A credit being “available” to all employers is not necessarily the same thing as all employers being “eligible”. I read “available” to mean – this credit is an option but there are certain requirements the employer has to meet in order to claim the credit. Whereas “eligible” would mean – the employers has met all the requirements.

1293 says the is available to all employers, not all employers are eligible.

However, the fact that 1293 references “enterprise zone” in the explanation of the “empowerment zone” credit makes me think that maybe the first one is talking about an enterprise zone employment credit. What were the questions asking? Maybe that would help…

[Author]

Replies