8844

OMB No. 1545-1444

Empowerment Zone Employment Credit
Form

Department of the Treasury

2000
Attachment
Internal Revenue Service 䊳 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 2000 (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—

其
3 EZE credits a Shareholder Schedule K-1 (Form 1120S), lines 12d, 12e, or 13
from pass- 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 2000 (see instructions) 7
8 Carryforward of EZE credit to 2000 8
9 Carryback of EZE credit from 2001 (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

其
11 Regular tax before credits:
● Individuals. Enter the amount from Form 1040, line 40
● Corporations. Enter the amount from Form 1120, Schedule J, line 3; Form 1120-A,
Part I, line 1; or the applicable line of your return 11
● Estates and trusts. Enter the sum of the amounts from Form 1041, Schedule G, lines 1a
and 1b, or the amount from the applicable line of your return
12 Alternative minimum tax:

其
● Individuals. Enter the amount from Form 6251, line 28
● Corporations. Enter the amount from Form 4626, line 15 12
● Estates and trusts. Enter the amount from Form 1041, Schedule I, line 39
13 Add lines 11 and 12 13
14a Foreign tax credit 14a
b Credit for child and dependent care expenses (Form 2441, line 9) 14b
c Credit for the elderly or the disabled (Schedule R (Form 1040), line 20) 14c
d Education credits (Form 8863, line 18) 14d
e Child tax credit (Form 1040, line 47) 14e
f Mortgage interest credit (Form 8396, line 11) 14f
g Adoption credit (Form 8839, line 14) 14g
h District of Columbia first-time homebuyer credit (Form 8859, line 11) 14h
i Possessions tax credit (Form 5735, line 17 or 27) 14i
j Credit for fuel from a nonconventional source 14j
k Qualified electric vehicle credit (Form 8834, line 19) 14k
l Add lines 14a through 14k 14l
15 Net income tax. Subtract line 14l from line 13 15
16 Tentative minimum tax (see instructions) 16
17 Multiply line 16 by 75% (.75) 17
18 Net regular tax. Subtract line 14l from line 11. If zero or less, enter -0- 18
19 Enter 25% (.25) of the excess, if any, of line 18 over $25,000 (see
instructions) 19
20 Enter the greater of line 17 or line 19 20
21 Subtract line 20 from line 15. If zero or less, enter -0- 21
22 General business credit (see instructions) 22
23 Subtract line 22 from line 21. If zero or less, enter -0- 23
24 EZE credit allowed for the current year. Enter the smaller of line 10 or line 23 here and on
Form 1040, line 49; Form 1120, Schedule J, line 6d; Form 1120-A, Part I, line 4a; Form 1041,
Schedule G, line 2c; or the applicable line of your return 24
For Paperwork Reduction Act Notice, see page 3. Cat. No. 16145S Form 8844 (2000)
Form 8844 (2000) Page 2

General Instructions ● Performs substantially all of the services for that

employer within an empowerment zone in the
Section references are to the Internal Revenue Code. employer’s trade or business and
A Change To Note ● Has his or her principal residence within that
empowerment zone while performing these services
Beginning in 2000, the empowerment zone (anywhere in the District of Columbia for the DC zone).
employment (EZE) credit is allowed with respect to the
Cleveland, OH, and Los Angeles, CA, empowerment Both full-time and part-time employees may qualify.
zones. The following are not qualified zone employees.
● Any relative of the employer described in sections
Purpose of Form 152(a)(1) through 152(a)(8).
Use Form 8844 to claim the EZE credit. The credit is ● A dependent of the employer described in section
20% of an employer’s current calendar year qualified 152(a)(9).
wages and certain training and educational expenses ● If the employer is a corporation, any individual who
paid or incurred on behalf of qualified zone employees. bears any of the relationships described in sections
Although the EZE credit is a component of the 152(a)(1) through 152(a)(8) to, or is a dependent
general business credit, a special tax liability limit described in section 152(a)(9) of, an individual who
applies to this credit. The credit is, therefore, figured owns (or is considered to own under section 267(c))
separately and is never carried to Form 3800, General more than 50% in value of the outstanding stock of
Business Credit. the corporation.
● If the employer is an entity other than a corporation,
Definitions any individual who owns directly or indirectly more
Empowerment zones are the areas designated from than 50% of the capital and profits interest, including
qualifying areas nominated by state and local constructive ownership, in the entity.
governments. For purposes of the EZE credit, the ● If the employer is an estate or trust, any individual
Secretary of Housing and Urban Development (HUD) who is a grantor, beneficiary, or fiduciary of the estate
has designated parts of the following cities as urban or trust (or a dependent, as described in section
empowerment zones. 152(a)(9), of that individual), or any individual who is a
● Atlanta, GA (9.29 square miles). relative, as described in sections 152(a)(1) through
● Baltimore, MD (6.8 square miles). 152(a)(8), of the grantor, beneficiary, or fiduciary of the
estate or trust.
● Chicago, IL (14.33 square miles).
● Any person who owns (or is considered to own
● Cleveland, OH (7.0 square miles). under section 318) more than 5% of the outstanding or
● Detroit, MI (18.3 square miles). voting stock of the employer, or if not a corporate
● Los Angeles, CA (city and county) (19.7 square employer, more than 5% of the capital or profits
miles). interest in the employer.
● New York, NY (Manhattan and the Bronx) (7.6 square ● Any individual employed by the employer for less
miles). than 90 days. For exceptions, see Early Termination
● Philadelphia, PA/Camden, NJ (4.4 square miles). of Employee below.
For purposes of the EZE credit, the Secretary of ● Any individual employed by the employer at any
Agriculture (USDA) has designated the following rural private or commercial golf course, country club,
empowerment zones. massage parlor, hot tub facility, suntan facility,
racetrack or other facility used for gambling, or any
● The Kentucky Highlands (part of Wayne and all of store the principal business of which is the sale of
Clinton and Jackson counties). alcoholic beverages for consumption off premises.
● Mid-Delta, Mississippi (parts of Bolivar, Holmes, ● Any individual employed by the employer in a trade
Humphreys, Leflore, Sunflower, and Washington or business, the principal activity of which is farming
counties). (within the meaning of section 2032A(e)(5)(A) or (B)), if
● Rio Grande Valley, Texas (parts of Cameron, Hidalgo, at the close of the tax year the sum of the following
Starr, and Willacy counties). amounts exceeds $500,000.
Under section 1400, parts of Washington, DC, are 1. The larger of the unadjusted bases or fair market
treated as an empowerment zone. For details, see value of the farm assets owned by the employer.
Notice 98-57, 1998-2 C.B. 671. 2. The value of the farm assets leased by the
You may call HUD at 1-800-998-9999 for information employer.
on the urban empowerment zones. You may call the
USDA at 1-800-645-4712 about the rural Early Termination of Employee
empowerment zones. On the Internet, visit the EZ/EC Generally, an individual is not a qualified zone
Home Page at www.ezec.gov. employee unless employed for at least 90 days. The
Qualified zone employee means any employee of 90-day requirement does not apply in the following
the employer who: situations.
Form 8844 (2000) Page 3

● The employee is terminated because of misconduct Line 2

as determined under the applicable state In general, you must reduce your deduction on your
unemployment compensation law. return for salaries and wages and certain educational
● The employee becomes disabled before the 90th and training costs by the line 2 credit amount. You
day. However, if the disability ends before the 90th must make this reduction even if you cannot take the
day, the employer must offer to reemploy the former full credit this year because of the tax liability limit. If
employee. you capitalized any costs on which you figured the
An employee is not treated as terminated if the credit, reduce the depreciable basis by the amount of
corporate employer is acquired by another corporation the credit attributable to these costs.
under section 381(a) and the employee continues to be Members of a controlled group of corporations and
employed by the acquiring corporation. Nor is a mere businesses under common control are treated as a
change in the form of conducting the trade or business single employer in determining the credit. The
treated as a termination if the employee continues to members share the credit in the same proportion that
be employed in such trade or business and the they paid or incurred qualifying wages.
taxpayer retains a substantial interest therein.
Line 5
Enter the amount included on line 4 that is from a
Specific Instructions passive activity. Generally, a passive activity is a trade
Complete lines 1 and 2 to figure the current year credit or business in which you did not materially participate.
for your trade or business. Skip lines 1 and 2 if you are Rental activities are generally considered passive
claiming only a credit that was allocated to you from a activities, whether or not you materially participate. For
flow-through entity. details, see Form 8582-CR, Passive Activity Credit
Line 1 Limitations (for individuals, trusts, and estates), or
Form 8810, Corporate Passive Activity Loss and Credit
Enter the total qualified zone wages paid or incurred Limitations (for corporations).
during calendar year 2000.
Line 7
Qualified zone wages are wages paid or incurred
by an employer for services performed by an employee Enter the passive activity credit allowed for the 2000
while the employee is a qualified zone employee EZE credit from Form 8582-CR or Form 8810. See the
(defined above). Wages have the same meaning as instructions for the applicable form for details.
given in section 51, and are generally defined as those Line 8
wages subject to the Federal Unemployment Tax Act
without regard to the dollar limitation. Enter the amount of the EZE credit you carried forward
from 1999.
For each qualified zone employee, the amount of
qualified zone wages that may be taken into account Line 9
for a calendar year is limited to the first $15,000. Use only if you amend your 2000 return to carry back
Wages do not include any amount taken into account an unused EZE credit from 2001.
in figuring the work opportunity credit on Form 5884.
The $15,000 limit is reduced by the amount of wages Line 10
paid or incurred during the year that are used in Pass-through entities allocate the credit as follows:
figuring the work opportunity credit for that employee.
S corporations and partnerships. Allocate the line 10
The following are also treated as wages paid to an credit among the shareholders or partners. Attach
employee. Form 8844 to the return and show the credit for each
● Amounts paid or incurred by the employer as shareholder or partner on Schedule K-1. Electing large
educational assistance payments excludable from the partnerships, include this credit in “general credits.”
employee’s gross income under section 127, but only if Estates and trusts. The line 10 credit is allocated
paid or incurred to a person who is not related to the between the estate or trust and the beneficiaries in
employer. For this purpose, a person is related to the proportion to the income allocable to each. On the
employer only if that person has a relationship to the dotted line to the left of the amount on line 10, the
employer described in section 267(b) or 707(b)(1) estate or trust should enter its part of the total credit.
(substituting “10 percent” where “50 percent” appears Label it “1041 Portion” and use this amount in Part II
in these sections), or the employer and that person are to figure the credit to claim on Form 1041, U.S.
engaged in trades or businesses under common Income Tax Return for Estates and Trusts.
control (within the meaning of subsections (a) and (b)
of section 52). Cooperatives. Most tax-exempt organizations cannot
take the EZE credit, but a cooperative described in
● Amounts paid or incurred by the employer on behalf section 1381(a) takes the credit to the extent of its tax
of an employee under age 19 for a youth training liability. Allocate the credit in excess of the tax liability
program operated by that employer in conjunction with limit to the patrons of the cooperative.
local education officials.
Form 8844 (2000) Page 4

Line 16 for tentative refund (Form 1045, Application for

Although you may not owe alternative minimum tax Tentative Refund, or Form 1139, Corporation
(AMT), you generally must still compute the tentative Application for Tentative Refund). If you file an
minimum tax (TMT) to figure your credit. For a small application for tentative refund, it must be filed by the
corporation exempt from the AMT under section 55(e), end of the tax year following the tax year in which the
enter zero. Otherwise, complete and attach the credit arose.
applicable AMT form or schedule. Enter on line 16 the
TMT from the line shown below. Paperwork Reduction Act Notice. We ask for the
● Individuals: Form 6251, line 26. information on this form to carry out the Internal
Revenue laws of the United States. You are required to
● Corporations: Form 4626, line 13. give us the information. We need it to ensure that you
● Estates and trusts: Form 1041, Schedule I, line 37. are complying with these laws and to allow us to figure
and collect the right amount of tax.
Line 19
You are not required to provide the information
See section 38(c)(3) for special rules that apply to requested on a form that is subject to the Paperwork
married individuals filing separate returns, controlled Reduction Act unless the form displays a valid OMB
groups, regulated investment companies, real estate control number. Books or records relating to a form or
investment trusts, and estates and trusts. its instructions must be retained as long as their
Line 22 contents may become material in the administration of
any Internal Revenue law. Generally, tax returns and
Enter the amount of all other allowed credits that make
return information are confidential, as required by
up the general business credit. If you filed Form 3800,
section 6103.
enter on line 22 the amount shown on line 18b of
Form 3800. If you had only a single separate general The time needed to complete and file this form will
business credit form (other than Form 6765, Credit for vary depending on individual circumstances. The
increasing Research Activities), enter on line 22 the estimated average time is:
credit from the last line of the credit form (e.g., line 18 Recordkeeping 9 hr., 5 min.
of Form 8586, Low-Income Housing Credit). If you Learning about the
filed only Form 6765, enter the credit from line 57 of law or the form 2 hr., 29 min.
that form.
Preparing and sending
Line 24 the form to the IRS 2 hr., 44 min.
If you cannot use all of the credit because of the tax If you have comments concerning the accuracy of
liability limit (line 23 is smaller than line 10), carry the these time estimates or suggestions for making this
excess credit back 1 year then forward for up to 20 form simpler, we would be happy to hear from you.
years. To carry back an excess credit, file an amended See the instructions for the tax return with which this
income tax return (Form 1040X, 1120X, or other form is filed.
amended return) for the prior tax year or an application