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Form 8844 – Empowerment Zone Employment Credit 2020

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Reap the Benefits of Empowerment Zones with Form 8844

As a business owner, you know the deal with tax incentives. They’re key to driving growth and boosting economic development. One of those incentives is the Empowerment Zone Employment Credit (aka Form 8844). Filling out this form lets you claim a federal tax credit for hiring employees in designated empowerment zones (EZs). 

form 8844 ez employment credit template

Understanding Empowerment Zones

Empowerment zones were created to stimulate economic growth in targeted communities. The federal government provides tax incentives to businesses located in these areas to encourage investment, job creation, and retention of employees.

The empowerment zone initiative, supported by both urban development and rural area strategies, offers a range of benefits for businesses in targeted communities, including the empowerment zone employment credit, available through Form 8844.

Claiming the Empowerment Zone Employment Credit

Empowerment zones are specially designated geographical areas where the federal government assists in economic development through various initiatives and technical assistance. These zones may be urban or rural and are typically regions that could significantly benefit from increased investment and job creation. The aim is to improve the economic conditions of these areas through public and private partnerships, with tax incentives acting as a key tool to attract businesses.

To claim the Empowerment Zone Employment Credit, you need to accurately complete and file it. However, navigating this form and ensuring you meet all the requirements can be challenging without expert help.

Our free, editable form template is designed to simplify this process, ensuring you can maximize your credit while staying compliant with all IRS regulations. We guide you through each step, offering detailed instructions and tips for each section of the form.


Our template is designed following IRS guidelines, ensuring your submission is correct and compliant.

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FAQ About Form 8844: EZ Employment Credit

To qualify for this credit, a business must pay wages to a qualified zone employee who lives and works in an empowerment zone. The wage credit is available for both part-time and full-time employees.
The Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA) designate and maintain the list of empowerment zones. You can check your business’s eligibility on their websites.
The credit is 20% of the employer’s qualified zone wages paid to each eligible employee up to $15,000 per year. Hence, the maximum credit amount per eligible employee is $3,000 per year.

Yes, you can claim other credits like the work opportunity tax credit along with the credit. However, the same wages cannot be used to calculate multiple credits.

The form, along with the credit, offers a significant opportunity for businesses to decrease their tax liability while contributing to the economic development of distressed rural areas. By retaining and hiring employees who live and work in these zones, businesses can play a crucial role in rejuvenating these communities.

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