Question

Green Corporation hires six individuals on January 4, 2019, all of whom qualify for the work opportunity credit. Three of these individuals receive wages of $8,500 during 2019, and each individual works more than 400 hours during the year. The other three individuals work 300 hours and receive wages of $5,000 during the year. Calculate the amount of Green’s work opportunity credit for 2019. If Green pays total wages of $140,000 to its employees during the year, how much of this amount is deductible in 2019 assuming that the work opportunity credit is taken

Answer 1

Answer: $4,650 Tax Credit

Explanation: Green Corporation is entitled to file for a work opportunity credit as it has given work opportunities to workers with significant barriers to employment.

Green Corporation is entitled to get 40% on wages paid per year on workers who worked for at least 400 hrs and 25% for at least 120 hrs

Green Corporation had 2 sets of workers in this category and they are:

Set 1 worked 400 hrs and are paid $8,500

Set 2 worked 300 hrs and are paid $5,000

to get the work opportunity credit for 2019:

$8,500 * 40%+ $5,000 *25% = $3,400+$1,250= $4,650