Instructions For Form 5884 Work Opportunity Credit

2015

Department of the Treasury

Internal Revenue Service

Instructions for Form 5884

Work Opportunity Credit

Section references are to the Internal Revenue Code

individual begins work. However, because the credit

unless otherwise noted.

expired at the end of 2014 and was retroactively extended

on December 18, 2015, you may be allowed more time to

Future Developments

submit Form 8850 for an individual who began work while

For the latest information about developments related to

the credit was expired or for a reasonable time after it was

Form 5884 and its instructions, such as legislation

extended. We will update

as this

enacted after they were published, go to

and any other additional information, including information

on the availability of the credit for long-term unemployed

individuals, becomes available.

What's New

If the SESA denies the request, it will provide a written

The work opportunity credit has been extended to

explanation of the reason for denial. If a certification is

cover employees who begin work after December 31,

revoked because it was based on false information

2014, and before January 1, 2020.

provided by the worker, wages paid or incurred after the

Empowerment zone designations have been extended

date you receive the notice of revocation don't qualify for

to cover 2015 and 2016.

the credit.

The Protecting Americans from Tax Hikes Act of 2015

added a new targeted group for qualified long-term

Targeted group employee. An employee is a member

unemployment recipients who begin work after 2015.

of a targeted group if he or she began working for you

before 2020 and is a:

General Instructions

Long-term family assistance recipient,

Qualified recipient of Temporary Assistance for Needy

Purpose of Form

Families (TANF),

Qualified veteran,

Use Form 5884 to claim the work opportunity credit for

Qualified ex-felon,

qualified first- and/or second-year wages you paid to or

Designated community resident,

incurred for targeted group employees during the tax year.

Vocational rehabilitation referral,

Your business doesn't have to be located in an

Summer youth employee,

empowerment zone or rural renewal county to qualify for

Supplemental Nutrition Assistance Program (SNAP)

this credit.

benefits (food stamps) recipient,

You can claim or elect not to claim the work opportunity

SSI recipient, or

credit any time within 3 years from the due date of your

Qualified long-term unemployment recipient (for

return on either your original return or an amended return.

individuals who begin work after 2015).

Partnerships, S corporations, cooperatives, estates,

See the Instructions for Form 8850 and section 51(d)

and trusts must file this form to claim the credit. All other

for details and restrictions.

taxpayers aren't required to complete or file this form if

Qualified Wages

their only source for this credit is a partnership, S

corporation, cooperative, estate, or trust. Instead, they

Wages qualifying for the credit have the same meaning as

can report this credit directly on Form 3800, General

wages subject to the Federal Unemployment Tax Act

Business Credit.

(FUTA) (determined without regard to the $7,000 FUTA

How To Claim the Credit

tax wage base). If the work performed by any employee

during more than half of any pay period qualifies under

You must ask for and be issued a certification for each

FUTA as agricultural labor, that employee’s wages subject

employee from the state employment security agency

to social security and Medicare taxes are qualified wages.

(SESA). The certification proves that the employee is a

For a special rule that applies to railroad employees, see

member of a targeted group. You must either:

section 51(h)(1)(B). Qualified wages for any employee

Receive the certification by the day the individual

must be reduced by the amount of any work

begins work; or

supplementation payments you received under the Social

Complete Form 8850, Pre-Screening Notice and

Security Act for the employee.

Certification Request for the Work Opportunity Credit, on

or before the day you offer the individual a job and receive

The amount of qualified wages for any employee is

the certification before you claim the credit.

zero if:

The employee didn't work for you for at least 120 hours,

If you complete Form 8850, it generally must be signed

The employee worked for you previously,

by you and the individual and submitted to the SESA of

The employee is your dependent,

the state in which your business is located (where the

The employee is related to you (see section 51(i)(1)), or

employee works) by the 28th calendar day after the

Jan 14, 2016

Cat. No. 13571O

Instructions For Form 5884 Work Opportunity Credit - 2015

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