Currently designated empowerment zones, areas where employers and other taxpayers can qualify for certain tax incentives, will remain in place at least through the end of this year.
The Internal Revenue Service said Tuesday the designations will remain in effect until the end of 2016. The announcement mainly affects businesses that would be able to claim the tax breaks on their 2015 and 2016 tax returns. Empowerment zones are typically distressed urban and rural communities where the federal and some state and local governments provide tax breaks, bonds, grants and other incentives to boost the local economy.
Congress extended the empowerment zone tax incentives program as part of last December’s tax extenders legislation, the PATH Act. In March, the IRS issued a notice in which it stated that any nomination for an empowerment zone that was in effect at the end of 2014 will have a new termination date of Dec. 31, 2016, unless the state or municipality specifically declined such an extension in a notification to the IRS. The deadline for sending a notification to the IRS was on May 24, but since no state or municipality declined to extend an empowerment zone designation, all the designations that were in effect on Dec. 31, 2014 will stay in effect through the end of this year.
This is the fourth extension of the empowerment zone expiration date. Back in 1993 when Congress created empowerment zones, most of the zones were supposed to expire at the end of 2009, but the only one that expired was in Washington, D.C., in 2011.
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