Fillable Form 5884 - Work Opportunity Credit

Form 5884 (2011)

Page

How To Claim the Credit

were for working in your trade or business.

Qualified wages do not include:

You must request and be issued a certification for each

employee from the state employment security agency

• Wages paid to or incurred for any employee during any

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

period for which you received payment for the employee

member of a targeted group. You must receive the

from a federally funded on-the-job training program;

certification by the day the individual begins work or

• Wages paid to or incurred for a summer youth employee

complete Form 8850, Pre-Screening Notice and Certification

for services performed while the employee lived outside an

Request for the Work Opportunity Credit, on or before the

empowerment zone;

day you offer the individual a job.

• Wages paid to or incurred for a designated community

If you complete Form 8850, it must be signed by you and

resident for services performed while the employee lived

the individual and submitted to the SESA by the 28th

outside an empowerment zone or rural renewal county;

calendar day after the individual begins work (by June 19,

2012, for all qualified veterans who begin work after

• Wages paid to or incurred for services performed by a

November 21, 2011, and before May 22, 2012). If the SESA

summer youth employee before or after any 90-day period

denies the request, it will provide a written explanation of the

between May 1 and September 15;

reason for denial. If a certification is revoked because it was

• Wages for services of replacement workers during a strike

based on false information provided by the worker, wages

or lockout; and

paid or incurred after the date you receive the notice of

• First-year wages paid to or incurred for a qualified

revocation do not qualify for the credit.

employee if you claim a social security tax exemption for

Targeted group employee. An employee is a member of a

wages paid to the employee after March 18, 2010, and

targeted group if he or she is a:

before January 1, 2011, on your employer's tax return (Form

• Long-term family assistance recipient,

941, etc.).

• Qualified recipient of Temporary Assistance for Needy

Member of Controlled Group or Business

Families (TANF),

Under Common Control

• Qualified veteran,

For purposes of figuring the credit, all members of a

• Qualified ex-felon,

controlled group of corporations (as defined in section 52(a))

and all members of a group of businesses under common

• Designated community resident,

control (as defined in section 52(b)), are treated as a single

• Vocational rehabilitation referral,

taxpayer. As a member, compute your credit based on your

• Summer youth employee,

proportionate share of qualified wages giving rise to the

group’s work opportunity credit. Enter your share of the

• SNAP recipient,

credit on line 2. Attach a statement showing how your share

• SSI recipient,

of the credit was figured, and enter “See attached” next to

• Unemployed veteran (if he or she began working for you

the entry space for line 2.

before 2011), or

Specific Instructions

• Disconnected youth (if he or she began working for you

before 2011).

Current Year Credit

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

Lines 1a, 1b, and 1c

details and restrictions.

Enter on the applicable line and multiply by the percentage

Qualified Wages

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

or incurred for employees who are members of a targeted

Wages qualifying for the credit generally have the same

group. Qualified first-year wages are qualified wages you

meaning as wages subject to the Federal Unemployment

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

Tax Act (FUTA). If the work performed by any employee

period beginning on the date the individual begins work for

during more than half of any pay period qualifies under

you. Qualified second-year wages are qualified wages you

FUTA as agricultural labor, that employee’s wages

paid to or incurred for certified long-term family assistance

subject to social security and Medicare taxes are qualified

recipients for work performed during the 1-year period

wages. For a special rule that applies to railroad

beginning on the day after the last day of the 1-year wage

employees, see section 51(h)(1)(B). Qualified wages for

period.

any employee must be reduced by the amount of any

The amount of qualified first-year wages and the amount

work supplementation payments you received under the

of qualified second-year wages that may be taken into

Social Security Act for the employee.

account for any employee certified as a long-term family

assistance recipient is limited to $10,000 per year.

The amount of qualified wages for any employee is

zero if:

The amount of qualified first-year wages that may be

taken into account for an employee certified as a qualified

• The employee did not work for you for at least 120

veteran is limited to the following amounts.

hours,

• $6,000 for a qualified veteran certified as being either (a) a

• The employee worked for you previously,

member of a family receiving assistance under the

• The employee is your dependent,

Supplemental Nutrition Assistance Program (SNAP) (food

stamps) for at least a 3-month period during the 15-month

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

period ending on the hiring date, or (b) unemployed for a

• 50% or less of the wages the employee received from you

period or periods totaling at least 4 weeks (whether or not

Form 5884 - Work Opportunity Credit - 2011 Page 2

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