If you lived in an enterprise zone and worked for a qualified employer within that zone you may be able to take this deduction. Your employer will provide you with Form IT-40QEC if you are eligible to claim this deduction.
The amount of the deduction is one-half of the earned income shown on that form or $7,500, whichever is less. If you and your spouse both have received Form IT-40QEC, you may each take this deduction for a combined maximum of $15,000 (no more than $7,500 per qualifying person). You must enclose Form IT-40QEC with the Form IT-40 to support any claimed deduction.
Enterprise zones have been established in areas of certain cities/locations. Use this website to look up contact information for a particular enterprise zone: www.aiez.org/directory.html.