Chesapeake Tax Advisors, LLC

Frequently asked questions about employment and location-based tax credits.

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Question 1.  What types of employers are most likely to benefit from these credits? Employers in the retail sector, hospitality industry, staffing companies, construction companies, and consulting firms which provide services on-site at various locations, as well as employers that hire many seasonal workers. In addition any employer located in a designated economic development area may be eligible for certain credits and incentives (many employers are often unaware their facility is located in such a zone because the zone boundaries may change from time to time). 

Question 2.   What types of credits are available to employers? Available credits include hiring credits and location based credits (such as the Work Opportunity Tax Credit, Empowerment Zone Credit, and State and Local Enterprise Zone Credits), and include the following: Work Opportunity Tax Credit - Up to $9,000 for each employee who meets certain specified criteria. Empowerment Zone/ Renewal Community Credit - Maximum is $3,000 per eligible employee per year.  Eligible employees must live and work in the Empowerment Zone State and Local Enterprise Zone Credit - Varies from state to state and locality to locality, could be as high as $8,000 per employee.

Question 3.  How do I determine whether I am eligible for any of these credits and whether it is worthwhile to pursue them? Location-based tax credits are determined in part by census tracts or zip codes.  Chesapeake Tax Advisors can quickly determine whether there are potential credits available to your business if you provide us with information about your work site locations and some general information about the composition of your workforce.  There is no charge for this initial consultation. We will charge a contingent fee based on the amount of credits obtained only if you decide to engage us to pursue the available credits.

 Question 4.  Are any of these credits available for prior tax years? Potentially your business can go back 3 years (4 years in some states) to amend tax returns to claim credits you did not claim in prior years.

Chesapeake Tax Advisors, LLC * 306 West Joppa Road * Baltimore * MD * 21204 * Phone: (410) 296-1154

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