By employing 18 to 39-year old residents from “government designated” renewal communities, empowerment zones, and rural renewal counties, eligible employers can claim a maximum of $2,400 per new hire. There’s no limit on the number of qualified new hires an eligible organization can hire. In addition, the new law extends the hire date to August 31, 2011.

Financial institutions hiring designated community residents have a big opportunity to reduce their tax liabilities. Potential new employees who reside in these “zones” no longer have to meet the government assistance requirements—they must simply reside in the “zone” during the eligible employment period. This expanded definition of the law, which went into effect on May 25, 2007, applies to hourly and salaried employees.

Read the IRS Publication 954 for full details of these available tax incentives including the definitions of the designated areas.

Hiring targeted groups in Minnesota
The empowerment zones in Minnesota include certain parts of Minneapolis while the rural renewal counties include Big Stone, Chippewa, Cottonwood, Faribault, Jackson, Kittson, Koochiching, Lac qui Parle, Lincoln, Marshall, Martin, Murray, Norman, Pipestone, Red Lake, Redwood, Renville, Stevens, Traverse, Wilkin, and Yellow Medicine. There are no renewal communities in Minnesota.

To view a list of designated areas in other states, use the address locator on the U.S. Department of Housing and Urban Development (HUD) Web site.

Claim WOTCs
To claim WOTCs, file Form 8850 with the appropriate state no later than the 28th day after the eligible new hire starts employment. If you have questions about how the expanded and extended WOTC will impact your financial institution, contact us.