OMB No. 1545-1444

Form 8844 Empowerment Zone and Renewal

Community Employment Credit

Department of the Treasury

Internal Revenue Service  Attach to your tax return. Attachment

Sequence No. 99

Name(s) shown on return Identifying number

Current Year Credit

1 Enter the total qualified wages paid or incurred during calendar year 2005 only (see instructions)

2 2

If you are a— Then enter the total of the current year credits from—

Schedule K-1 (Form 1120S), box 13, code F, G, or M

Schedule K-1 (Form 1065), box 15, code F, G, or M

Schedule K-1 (Form 1041), box 13, code K

Written statement from cooperative

a Shareholder

b Partner

c Beneficiary

d Patron

5

5

6 6

7

9

Part I



Cat. No. 16145S

3

4

3

4

Add lines 1a and 1b. You must subtract this amount from your deduction for salaries and wages

Form 8844

credits from

pass-through

entities:

Add lines 2 and 3

Empowerment zone and renewal community employment credit included on line 4 from passive

activities (see instructions)

Subtract line 5 from line 4

Passive activity credit allowed for 2005 (see instructions)

Carryback of empowerment zone and renewal community employment credit from 2006 (see instructions)

Current year credit. Add lines 6 through 9. (S corporations, partnerships, estates, trusts, and

cooperatives, see instructions.)

10

10

9

7

For Paperwork Reduction Act Notice, see page 4. Form 8844 (2005)

8 Carryforward of empowerment zone and renewal community employment credit to 2005 8

Part II Allowable Credit

● Individuals. Enter the amount from Form 1040, line 44

11 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

●

●

14a 14a

b Credits from Form 1040, lines 48 through 54 14b

14d

Foreign tax credit

d

e 14e

Possessions tax credit (Form 5735, line 17 or 27)

f

Nonconventional source fuel credit (Form 8907, line 23)

Other specified credits (see instructions)

Add lines 14a through 14e 14f

Net income tax. Subtract line 14f from line 13. If zero, skip lines 16 through 22 and enter -0- on line 23 15

Alternative minimum tax:

12

Tentative minimum tax (see instructions)

16

11

Enter 25% (.25) of the excess, if any, of line 16 over $25,000 (see instructions)

13

20

c 14c

Regular tax before credits:

13

12

Enter the greater of line 18 or line 19

18

19

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

Net regular tax. Subtract line 14f from line 11. If zero or less, enter -0-

15



16

Multiply line 17 by 75% (.75)

17

18

19

20

17

a Qualified empowerment zone wages

b Qualified renewal community wages

1a

1b

$ X 20% (.20)

$ X 15% (.15)

Subtract line 20 from line 15. If zero or less, enter -0-

24

21

General business credit (see instructions)

Subtract line 22 from line 21

21

22

23

24

22

23

Credit allowed for the current year. Enter the smaller of line 10 or line 23 here and on Form 1040, line 55; Form

1120, Schedule J, line 6d; Form 1120-A, Part I, line 2; Form 1041, Schedule G, line 2c; or the applicable line of your

return. If line 23 is smaller than line 10, see instructions

Add lines 11 and 12

Individuals. Enter the amount from Form 6251, line 35

Corporations. Enter the amount from Form 4626, line 14

Estates and trusts. Enter the amount from Form 1041, Schedule I, line 56

●

●

● 

2005
Form 8844 (2005) Page 2

Although the credit is a component of

the general business credit, a special tax

liability limit applies. The allowable

credit, therefore, is figured on Form

8844 and is not carried to Form 3800,

General Business Credit.

General Instructions

Section references are to the Internal

Revenue Code.

Purpose of Form

Use Form 8844 to claim the

empowerment zone and renewal

community employment (EZRCE) credit.

For tax years that include December 31,

2005, the credit is:

● 20% of the employer’s qualified

wages (up to $15,000) paid or incurred

during calendar year 2005 on behalf of

qualified empowerment zone employees

plus

● 15% of the employer’s qualified

wages (up to $10,000) paid or incurred

during calendar year 2005 on behalf of

qualified renewal community employees.

Empowerment Zones

Rural areas. Parts of the following rural

areas are empowerment zones. You can

find out if your business or an

employee’s residence is located within a

rural empowerment zone by using the

RC/EZ/EC Address Locator at

www.hud.gov/crlocator or by calling

1-800-998-9999.

● Desert Communities, CA (part of

Riverside County)

● Southwest Georgia United, GA (part of

Crisp County and all of Dooly County)

● Southernmost Illinois Delta, IL (parts

of Alexander and Johnson Counties and

all of Pulaski County)

● Kentucky Highlands, KY (part of

Wayne County and all of Clinton and

Jackson Counties)

● Aroostook County, ME (part of

Aroostook County)

● Mid-Delta, MS (parts of Bolivar,

Holmes, Humphreys, Leflore, Sunflower,

and Washington Counties)

● Griggs-Steele, ND (part of Griggs

County and all of Steele County)

● Oglala Sioux Tribe, SD (parts of

Jackson and Bennett Counties and all of

Shannon County)

● Middle Rio Grande FUTURO

Communities, TX (parts of Dimmit,

Maverick, Uvalde, and Zavala Counties)

● Rio Grande Valley, TX (parts of

Cameron, Hidalgo, Starr, and Willacy

Counties)

Qualified empowerment zone

employee. A qualified empowerment

zone employee is any employee

(full-time or part-time) of the employer

who:

● Performs substantially all of the

services for that employer within an

empowerment zone in the employer’s

trade or business and

● Has his or her principal residence

within that empowerment zone while

performing those services (employees

who work in the Washington, DC

empowerment zone may live anywhere

in the District of Columbia).

See Qualified Employees on page 3

for a list of persons who are not

qualified employees.

Renewal Communities 

● Greene-Sumter County, AL

● Mobile County, AL

● Southern Alabama

● Los Angeles, CA

● Orange Cove, CA

● Parlier, CA

● San Diego, CA

● San Francisco, CA

● Atlanta, GA

● Chicago, IL

● Eastern Kentucky

● Central Louisiana

● New Orleans, LA

● Northern Louisiana

● Ouachita Parish, LA

● Lawrence, MA

● Lowell, MA

● Detroit, MI

● Flint, MI

● West Central Mississippi

● Turtle Mountain Band of Chippewa, ND

● Camden, NJ

● Newark, NJ

● Buffalo-Lackawanna, NY

Parts of the following areas are renewal

communities. You can find out if your

business or an employee’s residence is

located within a renewal community by

using the RC/EZ/EC Address Locator at

www.hud.gov/crlocator or by calling

1-800-998-9999.

● Jamestown, NY

● Niagara Falls, NY

● Rochester, NY

● Schenectady, NY

● Hamilton, OH

● Youngstown, OH

● Philadelphia, PA

● Charleston, SC

● Chattanooga, TN

● Memphis, TN

● Corpus Christi, TX

● El Paso County, TX

● Tacoma, WA

● Burlington, VT

Urban areas. Parts of the following

urban areas are empowerment zones.

You can find out if your business or an

employee’s residence is located within

an urban empowerment zone by using

the RC/EZ/EC Address Locator at

www.hud.gov/crlocator or by calling

1-800-998-9999.

● Pulaski County, AR

● Tucson, AZ

● Fresno, CA

● Los Angeles, CA (city and county)

● Santa Ana, CA

● New Haven, CT

● Jacksonville, FL

● Miami/Dade County, FL

● Chicago, IL

● Gary/Hammond/East Chicago, IN

● Boston, MA

● Baltimore, MD

● Detroit, MI

● Minneapolis, MN

● St. Louis, MO/East St. Louis, IL

● Cumberland County, NJ

● New York, NY

● Syracuse, NY

● Yonkers, NY

● Cincinnati, OH

● Cleveland, OH

● Columbus, OH

● Oklahoma City, OK

● Philadelphia, PA/Camden, NJ

● Columbia/Sumter, SC

● Knoxville, TN

● El Paso, TX

● San Antonio, TX

● Norfolk/Portsmouth, VA

● Huntington, WV/Ironton, OH

Washington, DC. Under section 1400,

parts of Washington, DC, are treated as

an empowerment zone. For details, use

the RC/EZ/EC Address Locator at

www.hud.gov/crlocator or see Notice

98-57, on page 9 of Internal Revenue

Bulletin 1998-47 at www.irs.gov/pub/irsirbs/irb98-47.pdf.

● Yakima, WA

● Milwaukee, WI
Form 8844 (2005) Page 3

● The employee becomes disabled

before the 90th day. However, if the

disability ends before the 90th day, the

employer must offer to reemploy the

former employee.

● The employee is terminated because

of misconduct as determined under the

applicable state unemployment

compensation law.

An employee is not treated as

terminated if the corporate employer is

acquired by another corporation under

section 381(a) and the employee

continues to be employed by the

acquiring corporation. Nor is a mere

change in the form of conducting the

trade or business treated as a

termination if the employee continues to

be employed in such trade or business

and the taxpayer retains a substantial

interest therein.

Specific Instructions

Complete lines 1 and 2 to figure the

current year credit for your trade or

business. Skip lines 1 and 2 if you are

only claiming a credit that was allocated

to you from a pass-through entity.

● Any person who owns (or is

considered to own under section 318)

more than 5% of the outstanding or

voting stock of the employer, or if not a

corporate employer, more than 5% of

the capital or profits interest in the

employer.

● Any individual employed by the

employer for less than 90 days. For

exceptions, see Early termination of

employee below.

● Any individual employed by the

employer at any private or commercial

golf course, country club, massage

parlor, hot tub facility, suntan facility,

racetrack or other facility used for

gambling, or any store the principal

business of which is the sale of alcoholic

beverages for consumption off premises.

Early termination of employee.

Generally, an individual is not a qualified

zone employee unless employed for at

least 90 days. The 90-day requirement

does not apply in the following

situations.

● Any individual employed by the

employer in a trade or business for

which the principal activity is farming

(see Note below), but only if at the close

of the tax year the sum of the following

amounts exceeds $500,000.

1. The larger of the unadjusted bases

or fair market value of the farm assets

owned by the employer.

2. The value of the farm assets leased

by the employer.

Wages

Wages are defined in section 51(c) and

generally are wages (excluding tips)

subject to the Federal Unemployment

Tax Act (FUTA), without regard to the

FUTA dollar limitation. The following are

also treated as wages.

● Amounts paid or incurred by the

employer as educational assistance

payments excludable from the

employee’s gross income under section

127. However, this does not apply if the

employee has a relationship to the

employer described in section 267(b) or

707(b)(1) (substituting "10 percent" for

"50 percent" in those sections) or the

employer and employee are engaged in

trades or businesses under common

control (within the meaning of sections

52(a) and (b)).

● Amounts paid or incurred by the

employer on behalf of an employee

under age 19 for a youth training

program operated by that employer in

conjunction with local education officials.

Line 1a—Qualified Empowerment

Zone Wages

Enter the total qualified empowerment

zone wages paid or incurred during

calendar year 2005. The credit must be

figured using only the wages that you

paid or incurred in the calendar year that

ended with or within your tax year. For

example, if your tax year began on April

1, 2005, and ended on March 31, 2006,

you must figure wages based on the

calendar year that began on January 1,

2005, and ended on December 31,

2005. Wages paid after the end of the

calendar year may be used only to figure

the credit claimed on the following

year’s tax return.

Qualified empowerment zone wages

are qualified wages paid or incurred by

an employer for services performed by

an employee while the employee is a

qualified empowerment zone employee

(defined earlier). The maximum wages

that may be taken into account for each

employee is limited to $15,000. The

$15,000 amount for any employee is

reduced by the amount of wages paid or

incurred during the calendar year on

behalf of that employee that are used in

figuring:

● The work opportunity credit (Form

5884) or

● The welfare-to-work credit (Form

8861).

Line 1b—Qualified Renewal

Community Wages

Enter the total qualified renewal

community wages paid or incurred

during calendar year 2005. The credit

must be figured using only the wages

that you paid or incurred in the calendar

year that ended with or within your tax

year. For example, if your tax year

began on April 1, 2005, and ended on

March 31, 2006, you must figure wages

based on the calendar year that began

on January 1, 2005, and ended on

December 31, 2005. Wages paid after

the end of the calendar year may be

used only to figure the credit claimed on

the following year’s tax return.

● If the employer is an estate or trust,

any individual who is a grantor,

beneficiary, or fiduciary of the estate or

trust (or a dependent, as described in

section 152(d)(2)(H), of such an

individual), or any individual who is a

relative, as described in sections

152(d)(2)(A) through 152(d)(2)(G), of the

grantor, beneficiary, or fiduciary of the

estate or trust.

● Any relative of the employer described

in sections 152(d)(2)(A) through

152(d)(2)(G).

● If the employer is an entity other than

a corporation, any individual who owns

directly or indirectly more than 50% of

the capital and profits interest, including

constructive ownership, in the entity.

● A dependent of the employer

described in section 152(d)(2)(H).

● If the employer is a corporation, any

individual who bears any of the

relationships described in sections

152(d)(2)(A) through 152(d)(2)(G), or is a

dependent described in section

152(d)(2)(H), of an individual who owns

(or is considered to own under section

267(c)) more than 50% in value of the

outstanding stock of the corporation.

Qualified renewal community

employee. A qualified renewal

community employee is any employee

(full-time or part-time) of the employer

who:

● Performs substantially all of the

services for that employer within a

renewal community in the employer’s

trade or business and

● Has his or her principal residence

within that renewal community while

performing those services.

See Qualified Employees below for a

list of persons who are not qualified

employees.

Qualified Employees 

Any person may be a qualified employee

except the following.

Note. Certain farming activities

described in section 2032A(e)(5)(A) or (B).
Form 8844 (2005) Page 4

Line 18

Line 24

Printed on recycled paper

Paperwork Reduction Act Notice. We

ask for the information on this form to

carry out the Internal Revenue laws of

the United States. You are required to

give us the information. We need it to

ensure that you are complying with

these laws and to allow us to figure and

collect the right amount of tax.

If you have comments concerning the

accuracy of these time estimates or

suggestions for making this form

simpler, we would be happy to hear from

you. See the instructions for the tax

return with which this form is filed.

Recordkeeping 8 hr., 22 min.

Learning about the

law or the form 2 hr., 22 min.

Preparing and sending

the form to the IRS 2 hr., 37 min.

The time needed to complete and file

this form will vary depending on

individual circumstances. The estimated

burden for individual taxpayers filing this

form is approved under OMB control

number 1545-0074 and is included in

the estimates shown in the instructions

for their individual income tax return. The

estimated burden for all other taxpayers

who file this form is shown below.

You are not required to provide the

information requested on a form that is

subject to the Paperwork Reduction Act

unless the form displays a valid OMB

control number. Books or records

relating to a form or its instructions must

be retained as long as their contents

may become material in the

administration of any Internal Revenue

law. Generally, tax returns and return

information are confidential, as required

by section 6103.

Line 14e

● Form 8834, Qualified Electric Vehicle

Credit, line 20,

● Form 8910, Alternative Motor Vehicle

Credit, line 18, and

● Form 8911, Alternative Fuel Vehicle

Refueling Property Credit, line 19.

Line 22

Enter the amount of all other allowed

credits that make up the general

business credit (other than a credit from

Form 6478 or Section B of Form 8835). If

you are filing Form 3800, enter on line 22

See section 38(c)(5) for special rules that

apply to married individuals filing

separate returns, controlled groups,

regulated investment companies, real

estate investment trusts, and estates and

trusts.

Include on line 14e any amounts claimed

on:

If you cannot use all of the credit

because of the tax liability limit (line 23

is smaller than line 10), carry the unused

credit back 1 year then forward up to 20

years. To carry back an unused credit,

file an amended income tax return (Form

1040X, 1120X, or other amended return)

for the prior tax year or an application

for tentative refund (Form 1045,

Application for Tentative Refund, or

Form 1139, Corporation Application for

Tentative Refund). If you file an

application for tentative refund, it

generally must be filed by the end of the

tax year following the tax year in which

the credit arose.

Cooperatives. Most tax-exempt

organizations cannot take the credit, but

a cooperative described in section

1381(a) can take the credit to the extent

of its tax liability. Allocate the credit in

excess of the tax liability limit to the

patrons of the cooperative.

Qualified renewal community wages

are qualified wages paid or incurred by

an employer for services performed by

an employee while the employee is a

qualified renewal community employee

(defined earlier). The maximum wages

that may be taken into account for each

employee is limited to $10,000. The

$10,000 amount for any employee is

reduced by the amount of wages paid or

incurred during the calendar year on

behalf of that employee that are used in

figuring:

● The work opportunity credit (Form

5884) or

● The welfare-to-work credit (Form 8861).

Members of a controlled group of

corporations and businesses under

common control are treated as a single

employer in determining the credit. The

members share the credit in the same

proportion that they paid or incurred

qualifying wages.

Line 2

Line 7

Line 5

In general, you must reduce your

deduction for salaries and wages and

certain educational and training costs by

the line 2 credit amount. You must make

this reduction even if you cannot take

the full credit this year because of the

tax liability limit. If you capitalized any

costs on which you figured the credit,

reduce the amount capitalized by the

amount of the credit attributable to

these costs.

Enter the amount included on line 4 that

is from a passive activity. Generally, a

passive activity is a trade or business in

which you did not materially participate.

Rental activities are generally considered

passive activities, whether or not you

materially participate. For details, see

Form 8582-CR, Passive Activity Credit

Limitations (for individuals, trusts, and

estates), or Form 8810, Corporate

Passive Activity Loss and Credit

Limitations (for corporations).

Enter the passive activity credit allowed

for the 2005 EZRCE credit from Form

8582-CR or Form 8810. See the

instructions for the applicable form for

details.

Line 9

Line 10

Estates and trusts. Allocate the credit

between the estate or trust and the

beneficiaries in proportion to the income

allocable to each. On the dotted line to

the left of the amount on line 10, the

estate or trust should enter its part of the

total credit. Label it “1041 Portion” and

use this amount in Part II to figure the

credit to claim on Form 1041, U.S.

Income Tax Return for Estates and Trusts.

S corporations and partnerships.

Allocate the credit among the

shareholders or partners. Attach Form

8844 to the return and show the credit

for each shareholder or partner on

Schedule K-1. Electing large

partnerships include this credit in

“general credits.”

Use only if you amend your 2005 return

to carry back an unused credit from

2006.

If line 10 is zero, skip Part II.

Pass-through entities allocate the

credit as follows.

the amount shown on line 19 of Form

3800. Otherwise, enter on line 22 the

credit from the last line of the credit

form (for example, line 17 of Form 8586,

Low-Income Housing Credit).

Line 17

● Individuals: Form 6251, line 33.

● Corporations: Form 4626, line 12.

● Estates and trusts: Form 1041,

Schedule I, line 54.

Although you may not owe alternative

minimum tax (AMT), you generally must

still compute the tentative minimum tax

(TMT) to figure your credit. For a small

corporation exempt from the AMT under

section 55(e), enter zero. Otherwise,

complete and attach the applicable AMT

form or schedule. Enter on line 17 the

TMT from the line shown below.