It can be tough to stay afloat in these tough economic times, but many California companies get a break when they qualify for corporate tax incentives. These might include enterprise zone credits, eco credits or federal hiring credits. When you combine them, they can drastically reduce the tax amount that your California company owes, and they will allow your company to help improve the economy in areas of the state that would benefit.
Corporations will find some of the best corporate tax incentives when they are located in an enterprise zone. There are forty-two enterprise zones located throughout the state of California. These are economically depressed areas where the state wants to encourage businesses to set up shop and hire locals, and thus they offer enterprise zone credits to help attract corporations.
If your company is located in one of the enterprise zones, then you may qualify for not only hiring credits but also eco credits. If you hire people who live in the enterprise zone who are members of certain qualifying groups, they can earn your company enterprise zone credits of up to $13,000 annually per employee. These targeted groups include disabled veterans, certain youth hires, qualified ex-felons meeting certain conditions, Native Americans, Pacific Islanders, those who have been laid off or had a threat of layoff, and others. Corporations will also find that hiring credits are available as well from the federal government. These come in the form of federal hiring credits, and your company may benefit from $2,400 to $4,800 annually per qualifying employee. Corporate tax credits are also available to enterprise zone-located companies that also work toward protecting the environment. Many companies choose to take advantage of corporate tax incentives when they purchase diesel-powered or hybrid vehicles for their company fleets. If your vehicles run on alternative fuels or electricity, your company many qualify for valuable corporate tax credits. Your company can also save when you install energy-saving devices in your place of business. If your company installs photovoltaic systems, wind generators geothermal heat pumps or solar water heaters, you may qualify. Federal credits are also available in addition to those corporate tax incentives at the state level, and this can net your company potentially another $4,000 credit when you purchase energy-saving equipment that costs up to $10,000.
To learn how enterprise zone credits and other corporate tax incentives might help your California-based corporation save money at tax time, please contact a California CPA with experience in corporate tax planning as well as the myriad of tax credits available to those companies located in an enterprise zone.
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Enterprise zone tax credits have been designed as an incentive for business to locate in these troubled neighborhoods and hire those who might not otherwise have such opportunities. Many states offer similar benefits, and the program is not new; urban enterprise zones are to be found in many cities and rural areas across the U.S.
