Development Zone Program Jobs Tax Credits

Effective for tax years beginning on or after 1/1/02, certified employers in the Community and Enterprise Development Zone programs can earn tax credits against Wisconsin income tax liability for each newly created full-time position.

"Full-time" is defined as a non-seasonal position for which the work schedule is 2,080 hours per year.) This tax credit is two-tiered and applies only to new hires that are Wisconsin residents. The credit also has a carry forward provision of up to fifteen years. The tax credits are as follows:

A tax credit of up to $6,000 for each newly-created full-time position filled by a Wisconsin resident who is not a member of a targeted group. The employer must obtain proof of residency and keep this information on file.

A tax credit of up to $8,000 for each newly-created full-time position filled by a Wisconsin resident who is a member of one of the target groups described below.

  In certain special cases, businesses certified under the Enterprise Development Zone program may be allocated tax credits of up to $8,000 for each existing position retained by the business.

Target Groups
Many of the service providers to the target groups listed below have their offices in Job Centers, located throughout the state.  The Job Service must certify the new hire as meeting the eligibility criteria. The Job Service charges the employer a $50 fee for each individual certified.

Following are detailed definitions of Wisconsin's eligible target group:

  1. Dislocated Workers:

A dislocated worker falls into any one of the following categories:

1. Has been terminated or laid-off or has received a termination or layoff notice or
   Is eligible for or has exhausted entitlement to unemployment compensation or
   Has been employed long enough to show attachment to the workforce, but is not eligible for unemployment compensation due to insufficient earnings or having performed services for an employer that were not covered under a State unemployment compensation law; and
   Is unlikely to return to a previous industry or occupation
2. Is employed at a facility where the employer has made a general announcement that the facility will close within 180 days
3. Was self-employed but is unemployed as a result of general economic conditions in the community in which the individual resides, or because of natural disasters
4. Is a displaced homemaker, i.e. an individual who has been providing unpaid services to family members in the home and who:
   a. Has been dependent on the income of another family member but is no longer supported by that income; and
   b. Is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment.

  2. Economically disadvantaged youths:

Any certified employee who is at least 18 years old but less than 23 years old on the hiring date and is a member of an economically disadvantaged family (The family's income level must have been no more than 70 percent of the Bureau of Labor Statistics' lower living standard during a specified period).

  3. Economically disadvantaged ex-convicts:

Any certified employee who:

1. Was conficted of a felony under any federal or state statute; and
2. Is a member of an economically disadvantaged family (See Economically Disadvantaged Youth); and
3. Is hired within five years of being convicted or released from prison.

Work release and deferred adjudication felons are eligible. Persons convicted of a felony while in the military are eligible. As an additional incentive for employers to hire ex-convicts, the U.S. Department of Labor sponsors a free Fidelity Bonding Program  to reduce the risk factor that often makes it difficult for ex-convicts to obtain employment.

  4. Vocational Rehabilitation Referrals:

Any certified employee who:

1. Has a physical or mental disability that results in a substantial barrier to employment and,
2. Is referred to the employer upon completing or while receiving rehabilitative services under:
   1. An individualized written rehabilitation plan under a state plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, or
   2. A program of vocational rehabilitation for veterans carried out under Chapter 31 of Title 38, United States Code.

A Division of Vocational Rehabilitation  (DVR) employment counselor will generally refer individuals in this category to employers.

  5. Economically Disadvantaged Veterans:

Any certified employee who:

1. Served on active duty (other than active duty for training) in the U.S. Armed Forces for more than 180 days or who was discharged or released from active duty because of a service-connected disability; or
2. Was not on active duty for more than a 90-day period other than active duty for training) or any day in the 60-day period that ends on the date the employee is hired; and
3. Is a member of an economically disadvantaged family (See Economically Disadvantaged Youth).

Dishonorably discharged veterans are included as veterans for tax credit purposes.

  6. General Assistance Recipients:

Any certified employee who received assistance under a qualified General Assistance program for any month ending within the 60-day period that ends on the date the employee is hired.

7. Supplemental Security Income (SSI) Recipients: 

Any certified employee who received Supplemental Security Income benefits for any month ending within the 60-day period that ends on the date the employee is hired.

  8. Qualified Summer Youth Employees:

Any certified employee who:

1. Works for the employer between May 1 and September 15; and
2. Is at least 16 or 17 years old on the hiring date, or on May 1 if the employee is hired before that date; and
3. Has not previously worked for the employer; and
4. Is a member of an economically disadvantaged family (See Economically Disadvantaged Youth).

An employer can claim the credit for a summer youth employee only once. If the employee continues working during the school year or on a permanent basis, the employee may be recertified as a member of another target group.

  9. Wisconsin Works - W2 Participants:

Any certified employee who:

1. Is employed in an unsubsidized job but meets the eligibility requirements under sec. 49.145 (2) and (3), Wis. Stats., for a Wisconsin Works employment position; or
2. Is employed in a trial job, as defined in sec. 49.141 (1)(n), Wis. Stats.; or
3. Is eligible for the Wisconsin Works health plan under sec. 49.153, Wis. Stats.; or
4. Is eligible for childcare assistance under sec. 49.155, Wis. Stats.

  10. Food Stamp Recipients:

Any certified employee who:

1. Is a member of a family receiving food stamps for six months immediately prior to the hiring date; or
2. Is a member of a family receiving food stamps for at least three months during the five months before the hiring date and whose benefits were canceled under sec. 6(o) of the Food Stamp Act of 1977.

  11. Resident of a federally-designated Enterprise Community:

Any certified employee who is a resident of a federally-designated enterprise community  . The designated area in Wisconsin is the Northwoods Niijii Enterprise Community in northern Wisconsin.