From TaxAlmanac, A Free Online Resource for Tax Professionals
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> Work opportunity credit
Discussion Forum Index --> Tax Questions --> Work opportunity credit
Bbowers (talk|edits) said:
| 17 December 2008
|
| I have several clients that have approved employees for the work opportunity credit. My question is if they have not met the first $6,000 of wages by year end do you wait to claim the credit in full the next or can you claim the portion that is for 2008 and then the balance in 2009? The form 5884 and publication 954 both do not address when the first year of employement spans two tax years. Any guidance is appreciated.
Thank you- Barry
|
Jctmstx (talk|edits) said:
| 17 December 2008
|
| Sorry to disagree but the instructions clearly state that the credit begins on the date of hire and runs for a one year from that date. So you take the portion of the first year credit at year end to the extent of wages paid. The remainder carrys over into the next tax year and then a portion of year two is taken, etc. So keep a running total of the months.
|
Bbowers (talk|edits) said:
| 17 December 2008
|
| I agree that it is clear that the credit covers the first 12 months but it does not say anything about the split. Based on the hire date an employee could not have enough payroll to qualify for the 40% credit but would for the 25%. I have no problem spanning 2 calender years but I do not it as being that clear.
|
DerekCPA (talk|edits) said:
| 17 December 2008
|
| For the purposes of the credit, you look at the hours as being in the year following the date of hire. If they reach 400 hours, in that period , you would take 40% credit on the eligible wages in year 1 and the remainder of the credit , up to the 2400 max in year 2.
|
Bbowers (talk|edits) said:
| 18 December 2008
|
| That is what I had planned on but wanted to make sure someone else agreed. Thanks for your reply.
|
To join in on this discussion, you must first
log in.
