This document provides instructions for claiming the Empowerment Zone and Renewal Community Employment Credit on Form 8844. It defines qualified wages paid or incurred in Empowerment Zones and Renewal Communities. It lists specific urban and rural areas designated as Empowerment Zones and parts of areas designated as Renewal Communities. It provides details on qualified employees and defines qualified Empowerment Zone and Renewal Community employees. It also provides instructions for completing lines 1 through 12 on Form 8844 to calculate the current year credit.

1. 8844 Empowerment Zone and Renewal OMB No. 1545-1444
2008
Form
Community Employment Credit
Attachment
Department of the Treasury
Attach to your tax return.
99
Internal Revenue Service Sequence No.
Name(s) shown on return Identifying number
1 Enter the total qualified wages paid or incurred during calendar year 2008 only (see instructions)
1a
a Qualified empowerment zone wages $ X 20% (.20)
1b
b Qualified renewal community wages $ X 15% (.15)
2
2 Add lines 1a and 1b. See instructions for the adjustment you must make to salaries and wages
3 Employment zone and renewable community employment credit from partnerships, S corporations,
3
cooperatives, estates, and trusts
4 Add lines 2 and 3. Partnerships and S corporations, report this amount on Schedule K; all others, go
4
to line 5
5 Empowerment zone and renewal community employment credit included on line 4 from passive
5
activities (see instructions)
6
6 Subtract line 5 from line 4
7
7 Passive activity credit allowed for 2008 (see instructions)
8
8 Carryforward of empowerment zone and renewal community employment credit to 2008
9
9 Carryback of empowerment zone and renewal community employment credit from 2009 (see instructions)
10 Add lines 6 through 9. Cooperatives, estates, and trusts, go to line 11. All others, report this amount
10
on Form 3800, line 24
11 Amount allocated to the patrons of the cooperative or the beneficiaries of the estate or trust (see
11
instructions)
12 Cooperatives, estates, and trusts. Subtract line 11 from line 10. Report this amount on Form 3800,
line 24 12
Form 8844 (2008)
For Paperwork Reduction Act Notice, see instructions. Cat. No. 16145S

2. 2
Form 8844 (2008) Page
● Knoxville, TN See Qualified Employees on page 3
General Instructions for a list of persons who are not
● El Paso, TX
Section references are to the Internal qualified employees.
● San Antonio, TX
Revenue Code.
● Norfolk/Portsmouth, VA
Renewal Communities
Purpose of Form ● Huntington, WV/Ironton, OH
Parts of the following areas are renewal
Use Form 8844 to claim the Washington, DC. Under section 1400, communities. You can find out if your
empowerment zone and renewal parts of Washington, DC, are treated as business or an employee’s residence is
community employment (EZRCE) credit. an empowerment zone. For details, use located within a renewal community by
For tax years that include December 31, the RC/EZ/EC Address Locator at using the RC/EZ/EC Address Locator at
2008, the credit is: www.hud.gov/crlocator or see Notice www.hud.gov/crlocator or by calling
● 20% of the employer’s qualified 98-57, on page 9 of Internal Revenue 1-800-998-9999.
Bulletin 1998-47 at
wages (up to $15,000) paid or incurred
● Greene-Sumter County, AL
www.irs.gov/pub/irs-irbs/irb98-47.pdf.
during calendar year 2008 on behalf of
● Mobile County, AL
qualified empowerment zone employees Rural areas. Parts of the following rural
● Southern Alabama
plus areas are empowerment zones. You can
● Los Angeles, CA
● 15% of the employer’s qualified find out if your business or an
● Orange Cove, CA
wages (up to $10,000) paid or incurred employee’s residence is located within a
during calendar year 2008 on behalf of rural empowerment zone by using the ● Parlier, CA
qualified renewal community employees. RC/EZ/EC Address Locator at
● San Diego, CA
www.hud.gov/crlocator or by calling
The credit is a component of the general ● San Francisco, CA
1-800-998-9999.
business credit, and a special tax liability
● Atlanta, GA
● Desert Communities, CA (part of
limit applies. The allowable credit is
● Chicago, IL
Riverside County)
figured in Part II of Form 3800, General
● Eastern Kentucky
● Southwest Georgia United, GA (part of
Business Credit.
● Central Louisiana
Crisp County and all of Dooly County)
Empowerment Zones ● Southernmost Illinois Delta, IL (parts ● New Orleans, LA
of Alexander and Johnson Counties and ● Northern Louisiana
Urban areas. Parts of the following
all of Pulaski County)
urban areas are empowerment zones. ● Ouachita Parish, LA
● Kentucky Highlands, KY (part of
You can find out if your business or an
● Lawrence, MA
employee’s residence is located within Wayne County and all of Clinton and
● Lowell, MA
an urban empowerment zone by using Jackson Counties)
● Detroit, MI
● Aroostook County, ME (part of
the RC/EZ/EC Address Locator at
● Flint, MI
www.hud.gov/crlocator or by calling Aroostook County)
1-800-998-9999. ● West Central Mississippi
● Mid-Delta, MS (parts of Bolivar,
● Pulaski County, AR ● Turtle Mountain Band of Chippewa, ND
Holmes, Humphreys, Leflore, Sunflower,
● Tucson, AZ and Washington Counties) ● Camden, NJ
● Fresno, CA ● Griggs-Steele, ND (part of Griggs ● Newark, NJ
● Los Angeles, CA (city and county) County and all of Steele County)
● Buffalo-Lackawanna, NY
● Oglala Sioux Tribe, SD (parts of
● Santa Ana, CA ● Jamestown, NY
Jackson and Bennett Counties and all of
● New Haven, CT ● Niagara Falls, NY
Shannon County)
● Jacksonville, FL ● Rochester, NY
● Middle Rio Grande FUTURO
● Miami/Dade County, FL ● Schenectady, NY
Communities, TX (parts of Dimmit,
● Chicago, IL ● Hamilton, OH
Maverick, Uvalde, and Zavala Counties)
● Gary/Hammond/East Chicago, IN ● Rio Grande Valley, TX (parts of ● Youngstown, OH
● Boston, MA Cameron, Hidalgo, Starr, and Willacy ● Philadelphia, PA
● Baltimore, MD Counties)
● Charleston, SC
● Detroit, MI Qualified empowerment zone
● Chattanooga, TN
employee. A qualified empowerment
● Minneapolis, MN ● Memphis, TN
zone employee is any employee
● St. Louis, MO/East St. Louis, IL ● Corpus Christi, TX
(full-time or part-time) of the employer
● Cumberland County, NJ ● El Paso County, TX
who:
● New York, NY ● Performs substantially all of the ● Burlington, VT
● Syracuse, NY services for that employer within an ● Tacoma, WA
empowerment zone in the employer’s
● Yonkers, NY ● Yakima, WA
trade or business and
● Cincinnati, OH ● Milwaukee, WI
● Has his or her principal residence
● Cleveland, OH
within that empowerment zone while
● Columbus, OH performing those services (employees
● Oklahoma City, OK who work in the Washington, DC,
● Philadelphia, PA/Camden, NJ empowerment zone may live anywhere
in the District of Columbia).
● Columbia/Sumter, SC

3. 3
Form 8844 (2008) Page
● Any individual employed by the
Qualified renewal community Specific Instructions
employee. A qualified renewal employer in a trade or business for
community employee is any employee which the principal activity is farming Complete lines 1 and 2 to figure the
(full-time or part-time) of the employer (see Note below), but only if at the close current year credit for your trade or
who: of the tax year the sum of the following business. Skip lines 1 and 2 if you are
amounts exceeds $500,000.
● Performs substantially all of the only claiming a credit that was allocated
to you from a pass-through entity.
services for that employer within a 1. The larger of the unadjusted bases
renewal community in the employer’s or fair market value of the farm assets Line 1a—Qualified Empowerment
trade or business and owned by the employer.
Zone Wages
● Has his or her principal residence 2. The value of the farm assets leased Enter the total qualified empowerment
within that renewal community while by the employer. zone wages paid or incurred during
performing those services.
calendar year 2008. The credit must be
Note. Certain farming activities are
See Qualified Employees below for a figured using only the wages that you
described in section 2032A(e)(5)(A) or (B).
list of persons who are not qualified paid or incurred in the calendar year that
Early termination of employee.
employees. ended with or within your tax year. For
Generally, an individual is not a qualified example, if your tax year began on April
Qualified Employees zone employee unless employed for at 1, 2008, and ended on March 31, 2009,
least 90 days. The 90-day requirement
Any person may be a qualified employee you must figure wages based on the
does not apply in the following
except the following. calendar year that began on January 1,
situations.
● Any relative of the employer described 2008, and ended on December 31,
● The employee is terminated because
in sections 152(d)(2)(A) through 2008. Wages paid after the end of the
152(d)(2)(G). calendar year may be used only to figure
of misconduct as determined under the
● A dependent of the employer the credit claimed on the following
applicable state unemployment
year’s tax return.
compensation law.
described in section 152(d)(2)(H).
● The employee becomes disabled
● If the employer is a corporation, any Qualified empowerment zone wages
are qualified wages paid or incurred by
before the 90th day. However, if the
individual who bears any of the
an employer for services performed by
disability ends before the 90th day, the
relationships described in sections
an employee while the employee is a
employer must offer to reemploy the
152(d)(2)(A) through 152(d)(2)(G), or is a
qualified empowerment zone employee
former employee.
dependent, as described in section
(defined earlier). The maximum wages
152(d)(2)(H), of an individual who owns An employee is not treated as
that may be taken into account for each
(or is considered to own under section terminated if the corporate employer is
employee is limited to $15,000. The
267(c)) more than 50% in value of the acquired by another corporation under
$15,000 amount for any employee is
outstanding stock of the corporation. section 381(a) and the employee
reduced by the amount of wages paid or
● If the employer is an entity other than continues to be employed by the
incurred during the calendar year on
acquiring corporation. Nor is a mere
a corporation, any individual who owns
behalf of that employee that are used in
change in the form of conducting the
directly or indirectly more than 50% of
figuring:
trade or business treated as a
the capital and profits interest, including
● The work opportunity credit (Form
termination if the employee continues to
constructive ownership, in the entity.
5884) or
be employed in such trade or business
● If the employer is an estate or trust,
● The welfare-to-work credit (Form
and the taxpayer retains a substantial
any individual who is a grantor,
interest therein. 8861).
beneficiary, or fiduciary of the estate or
trust (or a dependent, as described in
Wages Line 1b—Qualified Renewal
section 152(d)(2)(H), of such an
Community Wages
individual), or any individual who is a Wages are defined in section 51(c) and
relative, as described in sections generally are wages (excluding tips) Enter the total qualified renewal
152(d)(2)(A) through 152(d)(2)(G), of the subject to the Federal Unemployment community wages paid or incurred
grantor, beneficiary, or fiduciary of the Tax Act (FUTA), without regard to the during calendar year 2008. The credit
estate or trust. FUTA dollar limitation. The following are must be figured using only the wages
● Any person who owns (or is also treated as wages. that you paid or incurred in the calendar
considered to own under section 318) ● Amounts paid or incurred by the year that ended with or within your tax
more than 5% of the outstanding or year. For example, if your tax year
employer as educational assistance
voting stock of the employer, or if not a began on April 1, 2008, and ended on
payments excludable from the
corporate employer, more than 5% of March 31, 2009, you must figure wages
employee’s gross income under section
the capital or profits interest in the based on the calendar year that began
127. However, this does not apply if the
employer. on January 1, 2008, and ended on
employee has a relationship to the
● Any individual employed by the December 31, 2008. Wages paid after
employer described in section 267(b) or
employer for less than 90 days. For the end of the calendar year may be
707(b)(1) (substituting quot;10 percentquot; for
exceptions, see Early termination of used only to figure the credit claimed on
quot;50 percentquot; in those sections) or the
employee below. the following year’s tax return.
employer and employee are engaged in
● Any individual employed by the trades or businesses under common
control (within the meaning of sections
employer at any private or commercial
52(a) and (b)).
golf course, country club, massage
● Amounts paid or incurred by the
parlor, hot tub facility, suntan facility,
racetrack or other facility used for employer on behalf of an employee
gambling, or any store the principal under age 19 for a youth training
business of which is the sale of alcoholic program operated by that employer in
beverages for consumption off premises. conjunction with local education officials.

4. 4
Form 8844 (2008) Page
did not materially participate. Rental
Qualified renewal community wages You are not required to provide the
activities are generally considered passive
are qualified wages paid or incurred by an information requested on a form that is
activities, whether or not you materially
employer for services performed by an subject to the Paperwork Reduction Act
participate. For details, see Form 8582-CR,
employee while the employee is a qualified unless the form displays a valid OMB
Passive Activity Credit Limitations (for
renewal community employee (defined control number. Books or records
individuals, trusts, and estates), or Form
earlier). The maximum wages that may be relating to a form or its instructions must
8810, Corporate Passive Activity Loss and
taken into account for each employee is be retained as long as their contents
Credit Limitations (for corporations).
limited to $10,000. The $10,000 amount for may become material in the
any employee is reduced by the amount of administration of any Internal Revenue
Line 7
wages paid or incurred during the calendar law. Generally, tax returns and return
year on behalf of that employee that are information are confidential, as required
Enter the passive activity credit allowed for
used in figuring: by section 6103.
the 2008 EZRCE credit from Form 8582-CR
or Form 8810. See the instructions for the The time needed to complete and file
● The work opportunity credit (Form applicable form for details. this form will vary depending on
5884) or
individual circumstances. The estimated
● The welfare-to-work credit (Form 8861). Line 9 burden for individual taxpayers filing this
form is approved under OMB control
Use only if you amend your 2008 return to
Line 2 number 1545-0074 and is included in
carry back an unused credit from 2009.
the estimates shown in the instructions
In general, you must reduce your
Line 11 for their individual income tax return. The
deduction for salaries and wages and
estimated burden for all other taxpayers
certain educational and training costs by A cooperative described in section 1381(a)
who file this form is shown below.
the line 2 credit amount. You must make must allocate to its patrons the credit in
Recordkeeping 4 hr., 4 min.
this reduction even if you cannot take the excess of its tax liability limit. Therefore, to
full credit this year because of the tax figure the unused amount of the credit Learning about the
liability limit. If you capitalized any costs on allocated to patrons, the cooperative must law or the form 2 hr., 22 min.
which you figured the credit, reduce the first figure its tax liability. While any excess
Preparing and sending
amount capitalized by the amount of the is allocated to patrons, any credit recapture
the form to the IRS 2 hr., 33 min.
credit attributable to these costs. applies as if the cooperative had claimed
the entire credit.
Members of a controlled group of If you have comments concerning the
corporations and businesses under accuracy of these time estimates or
common control are treated as a single suggestions for making this form
employer in determining the credit. The Paperwork Reduction Act Notice. We simpler, we would be happy to hear from
members share the credit in the same ask for the information on this form to you. See the instructions for the tax
proportion that they paid or incurred carry out the Internal Revenue laws of return with which this form is filed.
qualifying wages. the United States. You are required to
give us the information. We need it to
Line 5 ensure that you are complying with
these laws and to allow us to figure and
Enter the amount included on line 4 that is
collect the right amount of tax.
from a passive activity. Generally, a passive
activity is a trade or business in which you