Rev. date: 08/21/2012
The Work Opportunity Credit provides an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. In most cases, the credit can be as much as 40% of the "qualified first year
wages."
- If the individual is a disabled veteran, the credit can be twice as
much.
- If the individual is a long-term family assistance recipient, the credit is available over a 2-year period and is calculated on a greater amount of
wages.
- The credit is claimed by filing
Form 5884 (PDF),
Work Opportunity Credit, with the business' tax return.
An individual is a member of a targeted group if he or she is
a:
- Qualified recipient of assistance under title IV of the Social Security
Act
- Qualified veteran
- Qualified ex-felon
- Designated community resident
- Vocational rehabilitation referral
- Qualified summer youth employee
- Qualified recipient of supplemental nutrition assistance program
benefits
- Qualified SSI recipient
- Long-term family assistance recipient
- Unemployed veteran (hired in 2009 or 2010)
- Disconnected youth (hired in 2009 or 2010)
An individual is not considered a member of a targeted group unless your state employment security agency certifies him or her as a
member.
- On or before the day on which the individual begins work for you, you can apply for and receive certification from your state employment security agency that the individual is a member of a targeted group,
or
- On or before the day you offer employment to an individual: (1) the individual completes page 1 of
Form 8850 (PDF),
Pre-Screening Notice and Certification Request for the Work Opportunity
Credit; and (2) you complete page 2 of the form, and you send the form to your state workforce agency no later than the 28th day after the individual begins
work.
- You
must
receive the certification before claiming the credit.
Previous Page |
Table of Contents |
Next Page
