Introduced in 1993, the Empowerment Zone (EZ), Enterprise Community (EC) , and Renewal Community (RC) Initiatives sought to reduce unemployment and generate economic growth through the designation of Federal tax incentives and award of grants to distressed communities. Local, Tribal, and State governments interested in participating in this program were required to present comprehensive plans that included the following principles:
- Strategic Visions for Change,
- Community-Based Partnerships,
- Economic Opportunities, and
- Sustainable Community Development.
Communities selected to participate in this program embraced these principles and led projects that promoted economic development in their distressed communities.
The EZ/EC initiative was implemented in the form of three competitions authorized by Congress in 1994 (round I), 1998 (round II), and 2001 (round III). These communities utilized HUD’s PERMS system to create Implementation Plans and develop Annual Reports, which can be publically accessed here and overall, display extensive community and economic development impacts in these distressed communities.
The EC designation expired in 2004 and EZ and RC designations generally expired at the end of 2009. However, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111-312 extended the Empowerment Zone and DC Enterprise Zone designations to December 31, 2011.
Following the end of the first EZ designation extension on December 31, 2011, the American Taxpayer Relief Act (ATRA) of 2012, signed into law by President Obama on January 2, 2013, provided for an extension of the Empowerment Zone designations for Empowerment Zone Tax Credit purposes only until December 31, 2013. The ATRA of 2012 did not extend the designation of the DC Enterprise Zone.
The third retroactive extension of the Empowerment Zone designation, for the purpose claiming EZ tax credits only, was the Tax Increase Prevention Act of 2014 (TIPA 2014). TIPA 2014 was signed into law by President Obama on December 19, 2014 and extended the EZ designation for the purpose of businesses and entities claiming EZ tax incentives until December 31, 2014. TIPA 2014 did not extend the designation of the DC Enterprise Zone.
For the EZ designation extensions, IRS Notice 2013-38 issued on May 29, 2013 (see link under the “What’s New” heading on the right ) explained a one step process stating that “any nomination for an Empowerment Zone that was in effect on December 31, 2009, is deemed amended to provide for a new termination date of December 31, 2013, unless the nominating entity sends written notification to the IRS by July 29, 2013.” The IRS has indicated that the process will be the same under TIPA 2014 and that any nomination for an Empowerment Zone that was in effect on December 31, 2013 will be deemed amended to provide for a new termination date of December 31, 2014, unless the nominating entity sends written notification to the IRS.
- To determine if a business address or an employee home address falls in an eligible Empowerment Zone, please visit http://egis.hud.gov/ezrclocator/. For questions related to the boundaries of Empowerment Zones, please email EGIS@hud.gov
- For more information for businesses and employers on qualifying and filing for EZ tax credits, please see the EZ Tax Incentives Summary Chart on the right side panel. All other information on the right side panel and in the linked webcasts and materials is still applicable, only the date of the designation period end is now December 31, 2014
If you have any further questions about the EZ, EC, or RC programs or associated tax credits available, please email the Office of Community Renewal (OCR) at OCRTaxCredit@hud.gov.
For a list of all active EZ communities, and local contact information for questions related to the implementation of specific EZ projects on the local level, please visit the EZ Communities webpage.
Please note, the District of Columbia Enterprise Zone designation incentives expired on December 31, 2011 and the Renewal Community tax incentives, expired on December 31, 2009. Neither the DC Enterprise Zone nor the Renewal Communities were renewed as a result of TIPA 2014. The Enterprise Community designations ended in 2004 and were not renewed by further legislation. The boundaries of these designations (DC Enterprise, Enterprise Communities, and Renewal Communities) will still appear on the HUD mapping tool at http://egis.hud.gov/ezrclocator/. However, they are expired. Only the Rounds 1, 2, and 3 Empowerment Zone designations have been extended. If you have any questions, please email us at OCRTaxCredit@hud.gov.