Late last week, the California Yuba Sutter Enterprise Zone received the long-anticipated approval of its new Targeted Employment Area. The effective date of this Targeted Employment Area stretches back retroactively to October 15, 2006 – the effective date of the Yuba Sutter Enterprise Zone itself.
A Targeted Employment Area is an economically distressed residential community located in close proximity to a CA enterprise zone. The California Enterprise Zone Hiring Credit program provides a CA income tax credit to eligible employers based on wages they pay to their qualifying employees. There are numerous categories of qualifying employees — one of which is an employee who resides within the boundaries of the Targeted Employment Area at the time of hire.
Now that Yuba Sutter’s new Targeted Employment Area has been approved by the CA Department of Housing and Community Development (HCD), wages paid to employees hired on or after October 15, 2006 can generate the tax credit if the business can prove the employee lived in the Targeted Employment Area at the time of hire.
Acceptable documentation includes a properly completed Form I-9 or W-4 signed at the time of hire. A copy of the employee’s drivers license issued prior to the hire date is also acceptable. Keep in mind, of course, that the document must show the employee resided at an address within the qualifying area.