R E N E W A L  C O M M U N I T Y  B E N E F I T S

 

TAX CREDITS AND INCENTIVES

In 2002, the U.S. Department of Housing and Urban Development (HUD) created the Renewal Community (RC) program to provide tax credits and incentives to encourage business investment and job creation in distressed communities.  

As one of forty communities nationwide, and five in New York State, the City of Jamestown received RC status for census tracts 303 and 305.  In 2005, the Senate and House of Representatives approved the addition of tracts 301 and 306.  NOTE:  BENEFITS IN THESE CENSUS TRACTS ARE RETROACTIVE TO 2002.  

To date, the RC incentives have helped to spur over nine million dollars in new development projects for Jamestown while creating or retaining 184 jobs.  In 2003, Jamestown businesses invested $16 million in commercial revitalization, receiving $8 million worth of tax deductions in return. 

BENEFITS (available until 2009):

  • Renewal Community Employment Credit - A federal wage tax credit of up to $1500 is available to RC employers for each RC resident/employee, both new hires and existing employees, who live and work in the RC.
  • Work Opportunity Tax Credit (WOTC) - RC resident/employees hired from targeted groups, i.e., unemployment, social services, below poverty level incomes, can earn an RC business a tax credit of up to $2,400. (This includes high-risk youth and qualified summer youth individuals who live in the RC.)
  • Welfare to Work Credits - RC businesses can earn up to $3,500 in the first year of employment of each long-term welfare recipient who resides in the RC.  The credit in Year 2 is $5,000. This is a two-year (2) credit.
  • Section 179 Deductions - A qualified RC business can expense up to $35,000 of additional qualified property, i.e., machinery and equipment during each year of the RC program (1/1/02-12/31/09) under Section 179 of the tax code, if at least 35% of the total workforce lives in the RC.
  • Zero-Percent Capital Gains Rate - Qualified RC businesses, with a work force of at least 35% RC residents, may receive a zero-percent capital gains rate for assets acquired after 1/1/2001 and before 1/1/2010, that are held for at least five years.
  • Environmental Cleanup Cost Deductions - An RC business can deduct necessary cleanup costs for designated brownfield sites.
  • Commercial Revitalization Credit - A qualified RC business constructing a new building or substantially rehabilitating an existing building in the RC may choose a 50% federal deduction in the year the building comes into service or a 10% deduction each year for 10 years.

Tax Incentives For Distressed Communities-Publication 954 (pdf)

Renewal Community Incentives (pdf)

Renewal Community Address Locater  

Renewal Community Employment Credit - Form 8844 (pdf)

*Note:  The following businesses are ineligible for RC Tax Credits: Golf Courses, Liquor Stores, Hot Tub Facilities, Racetracks, Country Clubs, Massage Parlors, Suntan Facilities, Gambling Facilities