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In The News

FTB Publishes FAQ Regarding The Caliornia Competes Tax Credits and the Winding Down of the EZ Program

Vouchering Expected to Continue Through 2014

Email: info@canditax.com
Ph: 310-402-2780

FAQ - Tax Credits

Frequently Asked Questions Specific to California Enterprise Zone Tax Credits:

What is an Enterprise Zone?

An Enterprise Zone is an economically depressed geographic area that has been designated by the State of California to encourage and stimulate business growth, development, and investment in the area. Taxpayers that conduct business activities within the boundaries of an Enterprise Zone qualify for special tax incentives.
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How do I know if I am located in an Enterprise Zone?

To verify whether your business is located within an Enterprise Zone, check the Enterprise Zones page. If you are within one of the designated areas, email us your address to maps@canditax.com to confirm eligibility.
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What types of industries qualify for the credit?

All industries qualify as long as they are within a zone.
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Shouldn’t my CPA be doing this for me already?

Tax credits are a specialty field of accounting because of the time and complexity involved in properly identifying and claiming the credits. Many accountants are aware of the credits but either subcontract the work to specialists like us or simply don’t claim the credits, or at least not all of the credits, for their clients. We do nothing but credits and partner with many accounting firms to perform the credit services for their clients.
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Are these State or Federal credits?

Both, but the majority of the credits are state credits. Whether you qualify for one or both depends on your business location. The state and Federal zones are located in similar or adjacent areas, sometimes they overlap and sometimes they are exclusive. If you would specific information on whether your business is in a state or federal zone, email us at maps@canditax.com.
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What if I am already taking the credit?

For our clients who are already taking advantage of the credit, our experience shows that because of our expertise, we are able to identify and claim 30% more in credits despite the client/tax preparer’s belief that they were already taking full advantage of these credit. There is no risk to you. If we don’t find more credits, we don’t get paid.
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How long does the process take to get the credits?

Typically, it takes a few weeks to gather the necessary information. At that point, it takes us about three weeks to complete our analysis. It then takes the regulating government agencies 2-6 weeks to certify our voucher applications. Once that process is complete, you can claim the credits on your current year return or amend prior year returns. It takes the Franchise Tax board approximately 6 months to process refunds based on amended returns.
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What documents do I need to produce from my files?

The necessary documents include payroll information and limited information from certain employee files (I-9 form, W4, etc.). We usually can obtain the necessary tax information from your accountant directly.
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What if I don’t want to pay consulting fees up front?

We understand that the cash flow issues many companies face. We don’t bill you until you receive a benefit from the credits either by reducing a current year tax obligation or when you receive the refund from an amended return.
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Will this project consume my HR personnel’s time?

No. We know what information we need and how to get it quickly and efficiently. If need be, we offer to send our staff to assist you in gathering documents, but typically, the process will not interfere with your operations.
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What tax years can I claim these credits for?

For businesses within Enterprise Zones, an amended tax return can be filed. Amended returns can be filed within four years from the original due date of the tax return, the date the tax return was filed, or within one year from the date the tax was paid, whichever is later. Essentially, that means you can look at the previous four years and compute the tax credits that your firm may qualify for. For businesses in federal zones (e.g. Empowerment Zones, Renewal Communities and Enterprise Communities), you can go back three years and calculate credits owed to you. Whether you are a business in an Enterprise or Federal zone, credits may be computed for the current year and subsequent years, as well. Once the Enterprise Zone credits are identified, they can be claimed until exhausted. They do not expire. The Federal Credits can be carried back one year and forward twenty until exhausted.
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