SIDEZ tax credits extended

The Southernmost Illinois Delta Empowerment Zone, SIDEZ, on Feb. 15 announced that empowerment zone tax credits have been extended through 2017.

"The extension of the empowerment zone, EZ, tax credit incentives will give many of our local businesses a significant tax break," SIDEZ executive director Tabatha Smith said in a news release.

All federally designated empowerment zones expired at the end of 2011, but the EZ tax incentives have been extended once again in the agreement signed on Feb. 9.  

This recent legislation essentially extends the EZ tax incentives continually from 2002 to the end of 2017, Smith said.

SIDEZ is one of 11 rural empowerment zones in the country and includes all of Pulaski County and parts of Alexander and Johnson counties.  

Three of four census tracts in Alexander County are in the EZ; Tamms, East Cape and McClure are not in the zone. One census tract in Johnson County is in the zone, including all of Johnson County south of Highway 146 and the City of Vienna.  

Businesses located in the areas listed above may be eligible to take up to $3,000 per employee credit on their federal income taxes, Smith said. 

To be eligible for the credit, the employee must live in the empowerment zone.  

A business may deduct 20 percent of the first $15,000 of wages paid to a qualified zone employee.  

EZ credits are available for both part-time and full-time employees as long as they have been employed by the employer for at least 90 days.  

Businesses in the empowerment zone that have not taken advantage of EZ tax credits in the past could generate a refund check by amending prior year tax returns.   

Unused credits can be carried forward 20 years and back three years, generally.    

Smith explained that some types of businesses are not eligible for the credit, such as suntan facilities, golf courses, stores whose principal business is the sale of alcoholic beverages for off-premise consumption and others.  

Some types of employees are not eligible, including certain related taxpayers or dependents, any 5 percent owner and others.  

Special limitations apply to farming trades or businesses. Businesses should consult their accountant to make sure employees are qualified zone employees and for eligibility of other tax credit benefits, Smith advised.

Smith said that while the SIDEZ organization serves all of Johnson, Pulaski, Union, Massac and Alexander counties, the empowerment zone as defined by the federal government is based on census tracts.    

SIDEZ Inc. administers a revolving loan fund targeted to small and emerging businesses in Johnson, Pulaski, Union, Massac and Alexander counties.  

Loans of up to $250,000 and as low as $1,000 at a current interest rate of 4.5 percent support local entrepreneurs and expand business opportunities for non-traditional borrowers.

"Thanks to the vision of the SIDEZ board of directors and its former executive directors the SIDEZ organization is well-poised to continue its mission of economic and community development for many years to come," Smith stated. 

More information about SIDEZ programs is available by contacting Smith at 618-745-6307.