8844
OMB No. 1545-1444
Empowerment Zone Employment Credit
Form
Department of the Treasury
1999
Attachment
Internal Revenue Service Attach to your return. Sequence No. 99
Name(s) shown on return Identifying number
Part I Tentative Empowerment Zone Employment (EZE) Credit
1 Enter the total qualified zone wages paid or incurred during calendar year 1999 (see instructions) 1
2 Current year credit. Multiply line 1 by 20% (.20) (see instructions) 2
If you are a— Then enter total of current year EZE credit(s) from—
3 EZE credits a Shareholder Schedule K-1 (Form 1120S), lines 12d, 12e, or 13
from flow- b Partner Schedule K-1 (Form 1065), lines 12c, 12d, or 13 3
c Beneficiary Schedule K-1 (Form 1041), line 14
through entities d Patron Written statement from cooperative
4 Total current year EZE credit. Add lines 2 and 3 4
5 EZE credit included on line 4 from passive activities (see instructions) 5
6 Subtract line 5 from line 4 6
7 EZE passive activity credit allowed for 1999 (see instructions) 7
8 Carryforward of EZE credit to 1999 8
9 Carryback of EZE credit from 2000 (see instructions) 9
10 Tentative EZE credit. Add lines 6 through 9. (S corporations, partnerships, estates, trusts, and
cooperatives, see instructions.) 10
Part II EZE Credit Limit Based on Amount of Tax
11 Regular tax before credits:
● Individuals. Enter amount from Form 1040, line 40
● Corporations. Enter amount from Form 1120, Schedule J, line 3 (or Form 1120-A, Part I, line 1) 11
● Other filers. Enter regular tax before credits from your return
12a Credit for child and dependent care expenses (Form 2441, line 9) 12a
b Credit for the elderly or the disabled (Sch. R (Form 1040), line 20) 12b
c Child tax credit (Form 1040, line 43) 12c
d Education credits (Form 8863, line 18) 12d
e Mortgage interest credit (Form 8396, line 11) 12e
f Adoption credit (Form 8839, line 15) 12f
g District of Columbia first-time homebuyer credit (Form 8859, line 11) 12g
h Foreign tax credit 12h
i Possessions tax credit (Form 5735, line 17 or 27) 12i
j Credit for fuel from a nonconventional source 12j
k Qualified electric vehicle credit (Form 8834, line 19) 12k
l Add lines 12a through 12k 12l
13 Net regular tax. Subtract line 12l from line 11 13
14 Alternative minimum tax:
● Individuals. Enter amount from Form 6251, line 28
● Corporations. Enter amount from Form 4626, line 15 14
● Estates and trusts. Enter amount from Form 1041, Schedule I, line 39
15 Net income tax. Add lines 13 and 14 15
16 Tentative minimum tax (see instructions) 16
17 Multiply line 16 by 75% (.75) 17
18 If line 13 is more than $25,000, enter 25% (.25) of the excess (see instructions) 18
19 Enter the greater of line 17 or line 18 19
20 Subtract line 19 from line 15. If zero or less, enter -0- 20
21 General business credit (see instructions) 21
22 Subtract line 21 from line 20. If zero or less, enter -0- 22
23 EZE credit allowed for the current year. Enter the smaller of line 10 or line 22. Complete lines 24
and 25 to determine how the credit is claimed on your tax return 23
24 Credit allowed against regular tax. Enter the smaller of line 23 or the excess of line 13 over line 21
here and on Form 1040, line 47; Form 1120, Schedule J, line 4d; Form 1120-A, Part I, line 2a;
Form 1041, Schedule G, line 2c; or the applicable line of your return 24
25 Credit allowed against alternative minimum tax. If line 23 is greater than line 24, enter the excess
here and see instructions on how to claim the credit 25
For Paperwork Reduction Act Notice, see page 4. Cat. No. 16145S Form 8844 (1999)
Form 8844 (1999) Page 3
General Instructions Qualified zone employee means any 1. The larger of the unadjusted bases
employee of the employer who: or fair market value of the farm assets
Section references are to the Inter nal owned by the employer, and
● Performs substantially all of the
Revenue Code.
services for that employer within an 2. The value of the farm assets leased
Purpose of Form empowerment zone in the employer’s by the employer.
trade or business, and
Use Form 8844 to claim the Early Termination of
empowerment zone employment (EZE) ● Has his or her principal residence
credit. The credit is 20% of an within that empowerment zone while Employee
employer’s current year qualified wages performing these services (anywhere in Generally, an individual is not a qualified
and certain training and educational the District of Columbia for the DC zone employee unless employed for at
expenses paid or incurred on behalf of zone). least 90 days. The 90-day requirement
qualified zone employees. Both full-time and part-time does not apply in the following
Although the EZE credit is a employees may qualify. situations:
component of the general business The following are not qualified zone ● The employee is terminated because
credit, a special tax liability limit applies employees: of misconduct as determined under the
to this credit. The credit is, therefore, ● Any relative of the employer described applicable state unemployment
figured separately and is never carried to in sections 152(a)(1) through 152(a)(8). compensation law.
Form 3800, General Business Credit. ● The employee becomes disabled
● A dependent of the employer
described in section 152(a)(9). before the 90th day. However, if the
Definitions disability ends before the 90th day, the
● If the employer is a corporation, any
Empowerment zones are the areas employer must offer to reemploy the
individual who bears any of the
designated from qualifying areas former employee.
relationships described in sections
nominated by state and local An employee is not treated as
152(a)(1) through 152(a)(8) to, or is a
governments. The Secretary of Housing terminated if the corporate employer is
dependent described in section 152(a)(9)
and Urban Development (HUD) acquired by another corporation under
of, an individual who owns (or is
designated parts of the following cities section 381(a) and the employee
considered to own under section 267(c))
as urban empowerment zones: continues to be employed by the
more than 50% in value of the
● Atlanta, GA (9.29 square miles); outstanding stock of the corporation. acquiring corporation. Nor is a mere
● Baltimore, MD (6.8 square miles); ● If the employer is an entity other than change in the form of conducting the
● Chicago, IL (14.33 square miles); a corporation, any individual who owns trade or business treated as a
directly or indirectly more than 50% of termination if the employee continues to
● Detroit, MI (18.3 square miles); be employed in such trade or business
the capital and profits interest, including
● New York, NY (Manhattan and the constructive ownership, in the entity. and the taxpayer retains a substantial
Bronx) (7.6 square miles); and interest therein.
● If the employer is an estate or trust,
● Philadelphia, PA/Camden, NJ (4.4
square miles).
any individual who is a grantor, Specific Instructions
beneficiary, or fiduciary of the estate or
The Secretary of Agriculture (USDA) trust (or a dependent, as described in Complete lines 1 and 2 to figure the
designated the following rural section 152(a)(9), of that individual), or current year credit for your trade or
empowerment zones: any individual who is a relative, as business. Skip lines 1 and 2 if you are
claiming only a credit that was allocated
● The Kentucky Highlands (part of described in sections 152(a)(1) through
152(a)(8), of the grantor, beneficiary, or to you from a flow-through entity.
Wayne and all of Clinton and Jackson
counties); fiduciary of the estate or trust. Line 1. Enter the total qualified zone
● Any person who owns (or is wages paid or incurred during calendar
● Mid-Delta, Mississippi (parts of Bolivar,
considered to own under section 318) year 1999.
Holmes, Humphreys, Leflore, Sunflower,
and Washington counties); and more than 5% of the outstanding or Qualified zone wages are wages
voting stock of the employer, or if not a paid or incurred by an employer for
● Rio Grande Valley, Texas (parts of
corporate employer, more than 5% of services performed by an employee
Cameron, Hidalgo, Starr, and Willacy
the capital or profits interest in the while the employee is a qualified zone
counties).
employer. employee (defined above). Wages have
Under section 1400, parts of the same meaning as given in section
Washington, DC, are treated as an ● Any individual employed by the
employer for less than 90 days. For 51, and are generally defined as those
empowerment zone. For more details, wages subject to the Federal
see Notice 98-57, 1998-47 I.R.B. 9. exceptions, see Early Termination of
Employee below. Unemployment Tax Act without regard to
You may call HUD at 1-800-998-9999 the dollar limitation.
for information on the urban ● Any individual employed by the
employer at any private or commercial For each qualified zone employee, the
empowerment zones. You may call the amount of qualified zone wages that
USDA at 1-800-645-4712 about the rural golf course, country club, massage
parlor, hot tub facility, suntan facility, may be taken into account for a
empowerment zones. On the Internet, calendar year is limited to the first
visit the EZ/EC Home Page at racetrack or other facility used for
gambling, or any store the principal $15,000. Wages do not include any
www.ezec.gov. amount taken into account in figuring
business of which is the sale of alcoholic
Except for the DC zone, each beverages for consumption off premises. the work opportunity credit on Form
designation remains in effect until the 5884. The $15,000 limit is reduced by
earliest of: ● Any individual employed by the the amount of wages paid or incurred
employer in a trade or business, the during the year that are used in figuring
1. December 31, 2004. principal activity of which is farming the work opportunity credit for that
2. The termination date designated by (within the meaning of section employee.
the state and local governments in their 2032A(e)(5)(A) or (B)), if at the close of
zone application, or the tax year the sum of the following
3. The date HUD or USDA revokes a amounts exceeds $500,000:
designation.
The designation of the DC zone will
end on December 31, 2002.
Form 8844 (1999) Page 4
Also treated as wages paid to an Line 9. Use only if you amend your 1999 Line 23. Because the EZE credit is
employee are: return to carry back an unused EZE allowed against both the regular tax and
● Amounts paid or incurred by the credit from 2000. AMT, you must allocate the credit
employer as educational assistance Line 10. Flow-through entities allocate between the two taxes by completing
payments excludable from the the credit as follows: lines 24 and 25.
employee’s gross income under section S corporations and partnerships. If you cannot use all of the credit
127, but only if paid or incurred to a Allocate the line 10 credit among the because of the tax liability limit (line 23
person who is not related to the shareholders or partners. Attach Form is smaller than line 10), carry the excess
employer. For this purpose, a person is 8844 to the return and show the credit credit back 1 year and then forward for
related to the employer only if that for each shareholder or partner on 20 years. To carry back an excess
person has a relationship to the Schedule K-1. Electing large credit, file an amended income tax
employer described in section 267(b) or partnerships, include this credit in return (Form 1040X, 1120X, or other
707(b)(1) (substituting “10 percent” “general credits.” amended return) for the prior tax year or
where “50 percent” appears in these an application for tentative refund (Form
sections), or the employer and that Estates and trusts. The line 10 credit
1045, Application for Tentative Refund,
person are engaged in trades or is allocated between the estate or trust
or Form 1139, Corporation Application
businesses under common control and the beneficiaries in proportion to the
for Tentative Refund). If you file an
(within the meaning of subsections (a) income allocable to each. On the dotted
application for tentative refund, it must
and (b) of section 52). line to the left of the amount on line 10,
be filed by the end of the tax year
the estate or trust should enter its part
● Amounts paid or incurred by the following the tax year in which the credit
of the total credit. Label it “1041
employer on behalf of an employee arose.
PORTION” and use this amount in Part II
under age 19 for a youth training to figure the credit to claim on Form Line 25. Reduce the amount of AMT
program operated by that employer in 1041, U.S. Income Tax Return for that you figured on Form 6251, Form
conjunction with local education officials. Estates and Trusts. 4626, or Form 1041, Schedule I, by the
Line 2. In general, you must reduce your line 25 amount and enter the reduced
Cooperatives. Most tax-exempt AMT amount on your income tax return
deduction on your return for salaries and organizations cannot take the EZE
wages and certain educational and (Form 1040, line 51; Form 1120,
credit, but a cooperative described in Schedule J, line 9; Form 1120-A, Part I,
training costs by the line 2 credit section 1381(a) takes the credit to the
amount. You must make this reduction line 6; or Form 1041, Schedule G, line
extent of its tax liability. Allocate the 6). On the dotted line to the left of the
even if you cannot take the full credit credit in excess of the tax liability limit to
this year because of the tax liability limit. AMT entry, write “EZE” and the line 25
the patrons of the cooperative. dollar amount.
If you capitalized any costs on which
you figured the credit, reduce the Line 16. Although you may not owe
depreciable basis by the amount of the alternative minimum tax (AMT), you
generally must still compute the Paperwork Reduction Act Notice. We
credit attributable to these costs. ask for the information on this form to
tentative minimum tax (TMT) to figure
Members of a controlled group of your credit. For a small corporation carry out the Internal Revenue laws of
corporations and businesses under exempt from the AMT under section the United States. You are required to
common control are treated as a single 55(e), enter zero. Otherwise, complete give us the information. We need it to
employer in determining the credit. The and attach the applicable AMT form or ensure that you are complying with
members share the credit in the same schedule. Enter on line 16 the TMT from these laws and to allow us to figure and
proportion that they paid or incurred the line shown below. collect the right amount of tax.
qualifying wages. You are not required to provide the
● Individuals: Form 6251, line 26.
Line 5. Enter the amount included on information requested on a form that is
● Corporations: Form 4626, line 13. subject to the Paperwork Reduction Act
line 4 that is from a passive activity.
Generally, a passive activity is a trade or ● Estates and trusts: Form 1041, unless the form displays a valid OMB
business in which you did not materially Schedule I, line 37. control number. Books or records
participate. Rental activities are generally Line 18. See section 38(c)(3) for special relating to a form or its instructions must
considered passive activities, whether or rules that apply to married individuals be retained as long as their contents
not you materially participate. For filing separate returns, controlled groups, may become material in the
details, see Form 8582-CR, Passive regulated investment companies, real administration of any Internal Revenue
Activity Credit Limitations (for estate investment trusts, and estates law. Generally, tax returns and return
individuals, trusts, and estates), or Form and trusts. information are confidential, as required
8810, Corporate Passive Activity Loss Line 21. Enter the amount of all other by section 6103.
and Credit Limitations (for corporations). allowed credits that make up the general The time needed to complete and file
Line 7. Enter the passive activity credit business credit. If you filed Form 3800, this form will vary depending on
allowed for the 1999 EZE credit from enter on line 21 the sum of the credits individual circumstances. The estimated
Form 8582-CR or Form 8810. See the from lines 17b and 37 of Form 3800. If average time is:
instructions for the applicable form for you had only a single separate general Recordkeeping 9 hr., 34 min.
details. business credit form (other than Form Learning about the
Line 8. Enter the amount of the EZE 6765, Credit for Increasing Research law or the form 2 hr., 29 min.
credit you carried forward from 1998. Activities), enter on line 21 the credit
from the last line of the credit form (e.g., Preparing and sending
line 17 of Form 8586, Low-Income the form to the IRS 2 hr., 45 min.
Housing Credit). If you filed only Form If you have comments concerning the
6765, enter the credit from line 56 of accuracy of these time estimates or
that form. suggestions for making this form
simpler, we would be happy to hear from
you. See the instructions for the tax
return with which this form is filed.