General Instructions For Form 5884 - 2007 (Page 2 of 3) in pdf

Form 5884 (2007)

Page

Wages paid to or incurred for services performed by a

back or forward. If you capitalized any costs on which you

summer youth employee before or after any 90-day period

figured the credit, reduce the amount capitalized by the credit

between May 1 and September 15; and

attributable to these costs.

Wages for services of replacement workers during a strike

Line 3

or lockout.

Enter the amount of credit that was allocated to you as a

Member of Controlled Group or Business

partner, shareholder, patron of a cooperative, or beneficiary.

Under Common Control

Line 5

Enter the amount included on line 4 that is from a passive

For purposes of figuring the credit, all members of a controlled

activity. Generally, a passive activity is a trade or business in

group of corporations (as defined in section 52(a)) and all

members of a group of businesses under common control (as

which you did not materially participate. Rental activities are

generally considered passive activities, whether or not you

defined in section 52(b)), are treated as a single taxpayer. As a

materially participate. For details, see Form 8582-CR, Passive

member, compute your credit based on your proportionate

share of qualified wages giving rise to the group’s work

Activity Credit Limitations (for individuals, estates, and trusts),

or Form 8810, Corporate Passive Activity Losses and Credit

opportunity credit. Enter your share of the credit on line 2.

Limitations (for corporations).

Attach a statement showing how your share of the credit was

figured, and enter “See attached” next to the entry space for

Line 7

line 2.

Enter the passive activity work opportunity credit allowed for

2007 from Form 8582-CR or Form 8810.

Specific Instructions

Line 8

Part I. Current Year Credit

Use line 8 to show any carryforward from 2006 of the New

York Liberty Zone business employee credit or any carryback

Lines 1a, 1b, and 1c

if you amend your 2007 return to carry back an unused work

Enter on the applicable line and multiply by the percentage

opportunity credit from 2008. Report any carryforward from

shown the total qualified first- or second-year wages paid to

2006 of the work opportunity credit on the Form 3800

or incurred for employees who are members of a targeted

carryforward line.

group. Qualified first-year wages are qualified wages you paid

Line 10

to or incurred for work performed during the 1-year period

Cooperatives. A cooperative described in section 1381(a)

beginning on the date the individual begins work for you.

must allocate to its patrons the credit in excess of its tax

Qualified second-year wages are qualified wages you paid to

liability limit. Therefore, to figure the unused amount of the

or incurred for certified long-term family assistance recipients

credit allocated to patrons, the cooperative must first figure its

for work performed during the 1-year period beginning on the

tax liability. While any excess is allocated to patrons, any

day after the last day of the 1-year wage period.

credit recapture applies as if the cooperative had claimed the

The amount of qualified first-year wages and the amount of

entire credit.

qualified second-year wages that may be taken into account

Estates and trusts. Allocate the work opportunity credit on

for any employee certified as a long-term family assistance

line 9 between the estate or trust and the beneficiaries in the

recipient is limited to $10,000 per year. The amount of

same proportion as income was allocated and enter the

qualified first-year wages that may be taken into account for

beneficiaries share on line 10.

any employee certified as a qualified veteran entitled to

compensation for a service-connected disability and who,

Part II. Allowable Credit

during the 1-year period ending on the hiring date, was either

The credit allowed for the current year may be limited based

(a) discharged or released from active duty in the U.S. Armed

on your tax liability. Use Part II to figure the allowable credit.

Forces, or (b) unemployed for a period or periods totaling at

least 6 months, is limited to $12,000. The amount of qualified

Line 12

first-year wages that may be taken into account for any

Enter the regular tax before credits from the following line of

employee certified as a summer youth employee is limited to

the appropriate form or schedule.

$3,000. The amount of qualifed first-year wages that may be

Individuals: Form 1040, line 44; Form 1040NR, line 41.

taken into account for an employee certified (if required) as a

Corporations: Form 1120, Schedule J, line 2; or the

member of any other targeted group is $6,000.

applicable line of your return.

Successor employer. For successor employers, the 1- or

Estates and trusts: The sum of the amounts from Form

2-year period begins on the date the employee began work for

1041, Schedule G, lines 1a and 1b; or the amount from the

the previous employer and any qualified first- or second-year

applicable line of your return.

wages paid or incurred by the successor employer are

Line 13

reduced by the qualified first or second-year wages paid or

incurred by the previous employer. See section 51(k)(1) and

Enter the alternative minimum tax (AMT) from the following line

Regulations section 1.51-1(h).

of the appropriate form or schedule.

A successor employer is an employer that acquires

Individuals: Form 6251, line 35.

substantially all of the property used in a trade or business (or

Corporations: Form 4626, line 14.

a separate unit thereof) of another employer (the previous

Estates and trusts: Form 1041, Schedule I, line 56.

employer) and immediately after the acquisition, the successor

employs in his or her trade or business an individual who was

Line 18

employed immediately prior to the acquisition in the trade or

See section 38(c)(5) for special rules that apply to married

business of the previous employer.

couples filing separate returns, controlled corporate groups,

Line 2

regulated investment companies, real estate investment

In general, you must reduce your deduction for salaries and

trusts, and estates and trusts.

wages by the amount on line 2. This is required even if you

cannot take the full credit this year and must carry part of it

General Instructions For Form 5884 - 2007 Page 2

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