Newark Urban Enterprise Zone

Newark Community Renewal Program

As of January 1, 2002, the City of Newark was designated a Renewal Community (RC) by the United States Department of Housing and Urban Development. The goal of this program is to promote economic development in distressed communities and to help residents of RCs gain employment and become economically self-sufficient. Rather than providing grants of funds or guarantees to finance development projects, the Renewal Community program seeks to achieve its goals through Federal tax benefits. These benefits are designed to encourage businesses to invest in RCs. 

Newark's RC is directed at attaining three overarching goals: Creating job opportunities, empowering our residents and creating sustainable community development. First and foremost, however, it is a job-generating program, consistent with the Federal government's new approach to advance economic prosperity in the nation's poorest communities by offering businesses a revitalizing tax incentive package. 

The Federal tax benefits available in the Newark RC include:

• RC Employment Credit - credit against Federal taxes of up to $1,500 for businesses for each year of RC designation for every existing employee and new hire who both lives and works within the RC.
  
• Work Opportunity Tax Credit - credit of up to $2,400 against Federal taxes to businesses for each new hire from groups that have high unemployment rates or other special employment needs, including youth ages 18 to 24 who live within an RC and summer hires ages 16 to 17 who live within an RC.
  
• Welfare to Work Credit - two-year credit against Federal taxes for businesses that hire long-term family assistance recipients. Credits up to $3,500 for the first year and up to $5,000 for the second year for each new hire.
  
• Increased Section 179 Expensing - allows businesses to claim an increased Section 179 deduction if they qualify as an RC business (up to $35,000 for property acquired after December 31, 2001). Can be claimed on certain depreciable property such as equipment and machinery.
  
• Commercial Revitalization Deduction - deduction of either one-half of qualified revitalization expenditures (QREs) in the first year a building is placed into service or all of QREs on ratable basis over 10 years if QREs have been allocated to revitalization of a commercial building located in an RC. The Commercial Revitalization Deduction allows an RC business owner to deduct the entire cost of the purchase and rehabilitation of a new facility from the company's federal tax liability over the next 10 years.

Application for the Commercial Revitalization Deduction program are available in City Hall, 920 Broad Street, Rm. B-16, Newark, NJ.

Because not all Census Tracts are located within the Newark Renewal Community, please consult the Program Coordinator to verify site eligibility.

For further information on the City of Newark Renewal Community Program please contact Angela Corbo, RC Coordinator, at 973-733-4331 or corboa@newarkuez.org

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