Work Opportunity Credit

Work Opportunity Credit

A tax credit a business owner was able to receive in 2009 and 2010 for hiring an unemployed or semi-employed veteran or young person. To be eligible for the credit, the veteran must have been discharged sometime in the five years previous to hiring and must have been on unemployment insurance for at least four weeks in the year prior to hiring. Likewise, a youth must have been between 16 and 24, a high school dropout without a GED and either unemployed or employed at a job in which he/she earned less than he/she would have working for minimum wage for 30 hours a week.
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There had been proposals to repeal the work opportunity credit and the credit for plug-in electric drive motor vehicles, but these proposals were not enacted.
Work opportunity credit has been extended through 2019 (Code Secs.
The first type of credits the flowchart lists, "Other passive activity credits," includes common business credits, such as the work opportunity credit, credit for increasing research activities, and the credit for employer Federal Insurance Contributions Act (FICA) taxes paid on certain tips.
As of this writing, the Work Opportunity credit has expired but is expected to be extended.
However, to qualify for the credit, employers must establish that the veteran they hired is a member of a targeted group that qualifies for the credit, by obtaining a Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, from a designated local agency (a state employment security agency).
The Work Opportunity credit relates to hiring workers from disadvantaged or disabled populations, including ex-felons.
A Tax Refund from Business Tax Credits--The general business credit is an overall limitation on many business-related tax credits, such as the work opportunity credit, research credit and credit for small-employer pension plan startup costs.
The Work Opportunity credit is a federal credit that gives employers a tax break for hiring certain jobseekers.
General business tax credits include the research credit, low-income housing credit, and the work opportunity credit.
Expenses must be to enable eligible small business to comply with the ADA Work Opportunity Credit (Form 5884/8850) and provides employers with an incentive to hire people with special employment needs.
For purposes of the work opportunity credit, a tax credit of 40% of first-year wages to an eligible employee up to $6,000, there is a new category of targeted (eligible) employee: Hurricane Katrina employee.
3768 would allow the work opportunity credit to be claimed for wages paid to an employee who had a principal place of abode in the Hurricane Katrina disaster area on August 28, 2005, who is being hired for a position in the area, and who begins working during the two-year period beginning on August, 29, 2005.