Federal Empowerment Zone Designation Update
The American Tax Relief Act of 2012 (H.B. 8), provides for an extension of the federal empowerment zone designations to the end of 2013. As a result of the legislation, the IRS updated Form 8844, Empowerment Zone Employment Credit. The IRS released the updated form and instructions in April 2013. The new form instructions have raised questions regarding the extension of the federal empowerment zone designations. The questions come from the instruction section “What’s New” on page 2.
The empowerment zone designations generally expired at the end of 2011. However, the American Taxpayer Relief Act of 2012 provides for an extension of the designations to the end of 2013. To extend the designations, state and local governments must amend their nominations for designation to change the termination date to December 31, 2013. The IRS is working with HUD and USDA to provide guidance on amending nominations for designation. The treatment of parts of Washington, D.C. as an empowerment zone ended at the end of 2011.
Each empowerment zone designation is eligible for an extension, but the extension process will not be automatic. Each zone will participate in the renewal process to extend the designated empowerment zone to December 31, 2013 (retroactive to January 1, 2012).
At this time Housing and Urban Development (HUD) and the IRS have not publically begun to post any zone extension information, since the renewal process has not been released by IRS/Treasury. Eventually, there will be a site where the extension can be monitored on a daily basis.
Equifax Workforce Solutions is working closely with HUD and the IRS as the renewal process moves forward. EWS will continue to process 2012 Federal Empowerment Employment Credit reports, since we are confident all empowerment zone designations will participate in the renewal process for extension. We will keep you posted on all updates pertaining to the empowerment zone extensions.