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Tax Credits
I. What Types of Businesses is Eligible?
Businesses of all types and sizes located within the four square mile Santa Ana Federal Empowerment Zone (FEZ) are eligible. To verify whether your business is within the FEZ, refer to the FEZ Map, call a FEZ representative, or check the FEZ street ranges.
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II. Description of Programs and Benefits:
The Santa Ana FEZ is a 10-year designation, ending December 31, 2009. It provides community grant funding and business federal tax incentives intended to revitalize the community. The federal tax incentives provided by the FEZ include:
- EMPOWERMENT ZONE EMPLOYMENT CREDIT (FEDERAL WAGE CREDIT)
As of January 1, 2002, any business located within the FEZ that hires or currently employs FEZ residents can qualify for an annual federal credit up to $3,000 per qualified employee. The 35% FEZ employee base requirement does not apply to this credit.
To claim the credit, please complete the FEZ Wage Credit Affidavit Form ( spanish form ) and submit to the FEZ office to receive address confirmation from a FEZ Representative.
- WORK OPPORTUNITY TAX CREDIT (WOTC)
Any business (need not be located in the FEZ) is eligible to earn up to $2,400 in federal tax credits for hiring individuals that meet one of 11 qualifying criteria's (one of the qualifying criteria's is being a FEZ resident). Beginning May 25, 2007 the law allows employers to begin taking this credit for hiring RC/EZ residents who are at least 18 years old but not yet 40. The 35% FEZ employee base requirement does not apply to this credit.
- INCREASED SECTION 179 DEDUCTION
Beginning in tax year 2002, qualified FEZ businesses are allowed to take an additional business deduction up to $35,000 on all or part of the cost of certain tangible qualifying equipment for the first year it is placed in service. The business must be located within the FEZ and 35% of their employee base must be FEZ residents.
- FEZ TAX-EXEMPT BOND FINANCING
A qualified FEZ business can apply for tax-exempt bond financing to purchase or renovate property or equipment. The business must be located within the FEZ and 35% of their employee base must be a FEZ resident.
III. Getting Started:
Once you have verified that your business address is located within the FEZ, consult your accountant or federal tax preparer and start taking advantage of the FEZ tax benefits. Contact the City of Santa Ana FEZ staff for more details about obtaining a Federal Wage Credit Affidavit for qualified employees.
IV. For More Information:
For more information on the federal tax incentives, please refer to:
In 1993, the City of Santa Ana was designated a State Enterprise Zone, which offers state tax credits to Santa Ana companies. If your company is located within the State Enterprise Zone, you may be eligible for the various state tax credit programs. To learn more about the State Enterprise Zone program, please contact the City of Santa Ana Economic Development Department at (714) 647-6987.
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