Amended 1978
- 1978 Pub. L. 95-600 Pub. L. 95–600 amended section generally and limited allowance of credit to the hiring of seven target groups with high unemployment rates.
(a) Determination of amount For purposes of section 38, the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year.
Amended 1984, 1986, 1996, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(d)(1), substituted “40 percent” for “35 percent”.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(a), (e)(1), substituted “work opportunity credit” for “targeted jobs credit” and “35 percent” for “40 percent”.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(b)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: “For purposes of section 38, the amount of the targeted jobs credit determined under this section for the taxable year shall be the sum of—
“(1) 50 percent of the qualified first-year wages for such year, and
“(2) 25 percent of the qualified second-year wages for such year.”
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 474(p)(1), substituted “For purposes of section 38, the amount of the targeted jobs credit determined under this section” for “The amount of the credit allowable by section 44B” in introductory provisions.
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(b) Qualified wages defined For purposes of this subpart—
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(b)(2)(A), redesignated par. (4) as (3) and struck out “, and the amount of the qualified second-year wages,” after “first-year wages” and struck out par. (3) which defined “qualified second-year wages”.
(1) In general The term “qualified wages” means the wages paid or incurred by the employer during the taxable year to individuals who are members of a targeted group.
(2) Qualified first-year wages The term “qualified first-year wages” means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 1041(c)(4), struck out “(or, in the case of a vocational rehabilitation referral, the day the individual begins work for the employer on or after the beginning of such individual’s rehabilitation plan)” after “begins work for the employer”.
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(3) Limitation on wages per year taken into account The amount of the qualified first-year wages which may be taken into account with respect to any individual shall not exceed $6,000 per year ($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II)).
Amended 1986, 2007, 2011
- 2011 Pub. L. 112-56 Pub. L. 112–56, § 261(a), substituted “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II))” for “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))”.
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(d)(2), substituted “Limitation on” for “Only first $6,000 of” in heading and inserted “($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))” before period at end.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(b)(2)(A), redesignated par. (4) as (3) and struck out “, and the amount of the qualified second-year wages,” after “first-year wages” and struck out par. (3) which defined “qualified second-year wages”.
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(c) Wages defined For purposes of this subpart—
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(1) In general Except as otherwise provided in this subsection and subsection (h)(2), the term “wages” has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section).
Amended 1980, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(f), struck out “, subsection (d)(8)(D),” after “this subsection”.
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(E)(ii), substituted “, subsection (d)(8)(D), and subsection (h)(2)” for “subsection (h)(2)”.
(2) On-the-job training and work supplementation payments
Amended 1980, 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 2638(b), designated existing provisions as subpar. (A), inserted par. (2) heading, and added subpar. (B).
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(iii), inserted “or incurred” after “amounts paid”.
(A) Exclusion for employers receiving on-the-job training payments The term “wages” shall not include any amounts paid or incurred by an employer for any period to any individual for whom the employer receives federally funded payments for on-the-job training of such individual for such period.
(B) Reduction for work supplementation payments to employers The amount of wages which would (but for this subparagraph) be qualified wages under this section for an employer with respect to an individual for a taxable year shall be reduced by an amount equal to the amount of the payments made to such employer (however utilized by such employer) with respect to such individual for such taxable year under a program established under section 482(e) [OLRC note: See References in Text note below.] of the Social Security Act.
Amended 1988
- 1988 Pub. L. 100-485 Pub. L. 100–485 substituted “section 482(e)” for “section 414”.
(3) Payments for services during labor disputes If—
Amended 1981, 1982, 1984, 1986, 1987
- 1987 Pub. L. 100-203 Pub. L. 100–203 added par. (3) and redesignated former par. (3) as (4).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(a), substituted “December 31, 1988” for “December 31, 1985”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 1041(a), substituted “December 31, 1985” for “December 31, 1984”.
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(a), substituted “1984” for “1982”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(B)(ii), redesignated par. (4) as (3). Former par. (3), which excluded from term “wages” any amount paid or incurred by the employer to an individual with respect to whom the employer claims credit under section 40 of this title, was struck out.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(a), extended termination date to Dec. 31, 1982, from Dec. 31, 1981, and inserted “to an individual who begins work for the employer” after “paid or incurred”.
(A) the principal place of employment of an individual with the employer is at a plant or facility, and
(B) there is a strike or lockout involving employees at such plant or facility,
the term “wages” shall not include any amount paid or incurred by the employer to such individual for services which are the same as, or substantially similar to, those services performed by employees participating in, or affected by, the strike or lockout during the period of such strike or lockout.
(4) Termination The term “wages” shall not include any amount paid or incurred to an individual who begins work for the employer after December 31, 2025.
Amended 1980, 1981, 1987, 1988, 1989, 1990, 1991, 1993, 1996, 1997, 1998, 1999, 2002, 2004, 2006, 2007, 2010, 2011, 2013, 2014, 2015, 2018, 2019, 2020
- 2020 Pub. L. 116-260 Pub. L. 116–260 substituted “December 31, 2025” for “December 31, 2020”.
- 2019 Pub. L. 116-94 Pub. L. 116–94 substituted “December 31, 2020” for “December 31, 2019”.
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(26), inserted period at end.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 142(a), substituted “December 31, 2019” for “December 31, 2014”.
- 2014 Pub. L. 113-295 Pub. L. 113–295 substituted “for the employer after December 31, 2014” for “for the employer—
“(A) after December 31, 1994, and before October 1, 1996, or
“(B) after December 31, 2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240 substituted “after December 31, 2013” for “after—
“(i) December 31, 2012, in the case of a qualified veteran, and
“(ii) December 31, 2011, in the case of any other individual.”
- 2011 Pub. L. 112-56 Pub. L. 112–56, § 261(d), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “after December 31, 2011.”
- 2010 Pub. L. 111-312 Pub. L. 111–312 substituted “December 31, 2011” for “August 31, 2011”.
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(a), substituted “August 31, 2011” for “December 31, 2007”.
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(a), substituted “2007” for “2005”.
- 2004 Pub. L. 108-311 Pub. L. 108–311, § 303(a)(1), substituted “2005” for “2003”.
- 2002 Pub. L. 107-147 Pub. L. 107–147 substituted “2003” for “2001”.
- 1999 Pub. L. 106-170 Pub. L. 106–170, § 505(a), substituted “December 31, 2001” for “June 30, 1999”.
- 1998 Pub. L. 105-277 Pub. L. 105–277, § 1002(a), substituted “June 30, 1999” for “June 30, 1998”.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(a), substituted “June 30, 1998” for “September 30, 1997”.
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(d), amended par. (4) generally. Prior to amendment, par. (4) read as follows: “Termination.—The term ‘wages’ shall not include any amount paid or incurred to an individual who begins work for the employer after December 31, 1994.”
- 1993 Pub. L. 103-66 Pub. L. 103–66, § 13102(a), substituted “December 31, 1994” for “June 30, 1992”.
- 1991 Pub. L. 102-227 Pub. L. 102–227 substituted “June 30, 1992” for “December 31, 1991”.
- 1990 Pub. L. 101-508 Pub. L. 101–508 substituted “December 31, 1991” for “September 30, 1990”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7103(a), substituted “September 30, 1990” for “December 31, 1989”.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 4010(a), substituted “1989” for “1988”.
- 1987 Pub. L. 100-203 Pub. L. 100–203 added par. (3) and redesignated former par. (3) as (4).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(B)(ii), redesignated par. (4) as (3). Former par. (3), which excluded from term “wages” any amount paid or incurred by the employer to an individual with respect to whom the employer claims credit under section 40 of this title, was struck out.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(a), extended termination date to Dec. 31, 1982, from Dec. 31, 1981, and inserted “to an individual who begins work for the employer” after “paid or incurred”.
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(A), substituted “December 31, 1981” for “December 31, 1980”.
(5) Coordination with payroll tax forgiveness The term “wages” shall not include any amount paid or incurred to a qualified individual (as defined in section 3111(d)(3)) 1 during the 1-year period beginning on the hiring date of such individual by a qualified employer (as defined in section 3111(d)) 1 unless such qualified employer makes an election not to have section 3111(d) 1 apply.
Amended 2010
- 2010 Pub. L. 111-147 Pub. L. 111–147 added par. (5).
(d) Members of targeted groups For purposes of this subpart—
Amended 1982, 1984, 1989, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(b), reenacted heading without change and amended text generally, revising and restating as pars. (1) to (11) provisions formerly contained in pars. (1) to (16).
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7103(c)(1), added subpar. (C).
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 1041(c)(2), inserted “For purposes of the preceding sentence, if on or before the day on which such individual begins work for the employer, such individual has received from a designated local agency (or other agency or organization designated pursuant to a written agreement with such designated local agency) a written preliminary determination that such individual is a member of a targeted group, then ‘the fifth day’ shall be substituted for ‘the day’ in such sentence.”
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(4), redesignated former par. (15) as (16).
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(f), substituted “on or before” for “before” in subpar. (A).
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(1) In general An individual is a member of a targeted group if such individual is—
(A) a qualified IV–A recipient,
(B) a qualified veteran,
(C) a qualified ex-felon,
(D) a designated community resident,
Amended 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(b)(2), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: “a high-risk youth,”.
(E) a vocational rehabilitation referral,
Amended 1980
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(iv), struck out “or” after “recipient,”.
(F) a qualified summer youth employee,
(G) a qualified supplemental nutrition assistance program benefits recipient,
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(D), (2)(O), substituted “supplemental nutrition assistance program benefits” for “food stamp”.
(H) a qualified SSI recipient,
Amended 1981, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(c)(1), added subpar. (H).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(1), added subpars. (H) and (I).
(I) a long-term family assistance recipient, or
Amended 1981, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(1), added subpar. (I).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(1), added subpars. (H) and (I).
(J) a qualified long-term unemployment recipient.
Amended 1982, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 142(b)(1), added subpar. (J).
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(3), added subpar. (J).
(2) Qualified IV–A recipient
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(A) In general The term “qualified IV–A recipient” means any individual who is certified by the designated local agency as being a member of a family receiving assistance under a IV–A program for any 9 months during the 18-month period ending on the hiring date.
Amended 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(b)(1), substituted “for any 9 months during the 18-month period ending on the hiring date” for “for at least a 9-month period ending during the 9-month period ending on the hiring date”.
(B) IV–A program For purposes of this paragraph, the term “IV–A program” means any program providing assistance under a State program funded under part A of title IV of the Social Security Act and any successor of such program.
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title III, § 316(a)], substituted “program funded” for “plan approved” and struck out “(relating to assistance for needy families with minor children)” after “Social Security Act”.
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(3) Qualified veteran
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(A) In general The term “qualified veteran” means any veteran who is certified by the designated local agency as—
(i) being a member of a family receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for at least a 3-month period ending during the 12-month period ending on the hiring date,
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(A), (B), (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977” and “supplemental nutrition assistance program” for “food stamp program”.
(ii) entitled to compensation for a service-connected disability, and—
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(B)(iii), substituted “paragraph (11)” for “paragraph (9)”.
(I) having a hiring date which is not more that 1 year after having been discharged or released from active duty in the Armed Forces of the United States, or
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(II) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months,
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(27), inserted comma at end.
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(iii) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 4 weeks (but less than 6 months), or
Amended 2011
- 2011 Pub. L. 112-56 Pub. L. 112–56, § 261(b), added cls. (iii) and (iv).
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(iv) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months.
Amended 2011
- 2011 Pub. L. 112-56 Pub. L. 112–56, § 261(b), added cls. (iii) and (iv).
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Amended 1997, 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(d)(1)(A), substituted “agency as—” and cls. (i) and (ii) for “agency as being a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date.”
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(b)(2), amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: “The term ‘qualified veteran’ means any veteran who is certified by the designated local agency as being—
“(i) a member of a family receiving assistance under a IV–A program (as defined in paragraph (2)(B)) for at least a 9-month period ending during the 12-month period ending on the hiring date, or
“(ii) a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date.”
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(B) Veteran For purposes of subparagraph (A), the term “veteran” means any individual who is certified by the designated local agency as—
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 4010(c)(1), substituted “age 23” for “age 25”.
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(ii) not having any day during the 60-day period ending on the hiring date which was a day of extended active duty in the Armed Forces of the United States.
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For purposes of clause (ii), the term “extended active duty” means a period of more than 90 days during which the individual was on active duty (other than active duty for training).
(C) Other definitions For purposes of subparagraph (A), the terms “compensation” and “service-connected” have the meanings given such terms under section 101 of title 38, United States Code.
Amended 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(d)(1)(B), added subpar. (C).
(4) Qualified ex-felon The term “qualified ex-felon” means any individual who is certified by the designated local agency—
(A) as having been convicted of a felony under any statute of the United States or any State, and
Amended 1980
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(v), substituted “active duty” for “active day”.
(B) as having a hiring date which is not more than 1 year after the last date on which such individual was so convicted or was released from prison.
Amended 1980
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(vi), substituted “preemployment” for “premployment”.
Amended 1981, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(b), inserted “and” at end of subpar. (A), substituted a period for “, and” at end of subpar. (B), and struck out subpar. (C) and concluding provisions which read as follows:
- 2006 “(C) as being a member of a family which had an income during the 6 months immediately preceding the earlier of the month in which such income determination occurs or the month in which the hiring date occurs, which, on an annual basis, would be 70 percent or less of the Bureau of Labor Statistics lower living standard.
Any determination under subparagraph (C) shall be valid for the 45-day period beginning on the date such determination is made.”
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(B)(iii), (3), in subpar. (B) inserted “and” after “States,” in subpar. (C) substituted “paragraph (11)” for “paragraph (9)”, and struck out “(D) not having attained the age of 35 on the hiring date.”
(5) Designated community residents
Amended 1980, 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(b)(1), amended heading and text of par. (5) generally. Prior to amendment, text read as follows:
- 2007 “(A) In general.—The term ‘high-risk youth’ means any individual who is certified by the designated local agency—
“(i) as having attained age 18 but not age 25 on the hiring date, and
“(ii) as having his principal place of abode within an empowerment zone, enterprise community, or renewal community.
- 2007 “(B) Youth must continue to reside in zone or community.—In the case of a high-risk youth, the term ‘qualified wages’ shall not include wages paid or incurred for services performed while such youth’s principal place of abode is outside an empowerment zone, enterprise community, or renewal community.”
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(vii), substituted “preemployment” for “pre-employment”.
(A) In general The term “designated community resident” means any individual who is certified by the designated local agency—
(i) as having attained age 18 but not age 40 on the hiring date, and
(ii) as having his principal place of abode within an empowerment zone, enterprise community, renewal community, or rural renewal county.
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title I, § 102(a)], substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community”.
(B) Individual must continue to reside in zone, community, or county In the case of a designated community resident, the term “qualified wages” shall not include wages paid or incurred for services performed while the individual’s principal place of abode is outside an empowerment zone, enterprise community, renewal community, or rural renewal county.
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title I, § 102(a), (c)], inserted “or community” after “zone” in heading and substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community” in text.
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(C) Rural renewal county For purposes of this paragraph, the term “rural renewal county” means any county which—
(6) Vocational rehabilitation referral The term “vocational rehabilitation referral” means any individual who is certified by the designated local agency as—
(A) having a physical or mental disability which, for such individual, constitutes or results in a substantial handicap to employment, and
“Substantial” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)
(B) having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to—
(i) an individualized written plan for employment under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973,
Amended 1982, 1998
- 1998 Pub. L. 105-277 Pub. L. 105–277, § 4006(c)(1), substituted “plan for employment” for “rehabilitation plan”.
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(d), substituted “consists of money payments or voucher or scrip, and” for “consists of money payments”.
(ii) a program of vocational rehabilitation carried out under chapter 31 of title 38, United States Code, or
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(j)(5)(A), substituted “Secretary of Health and Human Services” for “Secretary of Health Education and Welfare”.
(iii) an individual work plan developed and implemented by an employment network pursuant to subsection (g) of section 1148 of the Social Security Act with respect to which the requirements of such subsection are met.
Amended 2007
- 2007 Pub. L. 110-28 Pub. L. 110–28, § 8211(c), added cl. (iii).
(7) Qualified summer youth employee
(A) In general The term “qualified summer youth employee” means any individual—
(i) who performs services for the employer between May 1 and September 15,
(ii) who is certified by the designated local agency as having attained age 16 but not 18 on the hiring date (or if later, on May 1 of the calendar year involved),
(iii) who has not been an employee of the employer during any period prior to the 90-day period described in subparagraph (B)(i), and
(iv) who is certified by the designated local agency as having his principal place of abode within an empowerment zone, enterprise community, or renewal community.
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title I, § 102(b)], substituted “empowerment zone, enterprise community, or renewal community” for “empowerment zone or enterprise community”.
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(B) Special rules for determining amount of credit For purposes of applying this subpart to wages paid or incurred to any qualified summer youth employee—
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(B)(iii), substituted “paragraph (11)” for “paragraph (9)”.
(i) subsection (b)(2) shall be applied by substituting “any 90-day period between May 1 and September 15” for “the 1-year period beginning with the day the individual begins work for the employer”, and
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(ii) subsection (b)(3) shall be applied by substituting “$3,000” for “$6,000”.
The preceding sentence shall not apply to an individual who, with respect to the same employer, is certified as a member of another targeted group after such individual has been a qualified summer youth employee.
(C) Youth must continue to reside in zone or community Paragraph (5)(B) shall apply for purposes of subparagraph (A)(iv).
Amended 2000
- 2000 Pub. L. 106-554 Pub. L. 106–554, § 1(a)(7) [title I, § 102(c)], inserted “or community” after “zone” in heading.
(8) Qualified supplemental nutrition assistance program benefits recipient
Amended 1980, 1983, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(28), substituted “supplemental nutrition assistance program benefits recipient” for “food stamp recipient” in heading.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 102(l)(1), substituted “clauses (i), (ii), and (iii) of subparagraph (A)” for “subparagraph (A)”.
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(E)(i), in heading substituted “Wages” for “Individual must be currently pursuing program” and in text substituted “In the case of remuneration” for “Wages shall be taken into account with respect to a qualified cooperative education program only if the wages are” and inserted “, wages, and unemployment insurance wages, shall be determined without regard to section 3306(c)(10)(C)”.
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(A) In general The term “qualified supplemental nutrition assistance program benefits recipient” means any individual who is certified by the designated local agency—
(i) as having attained age 18 but not age 40 on the hiring date, and
Amended 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(c), substituted “40” for “25”.
(ii) as being a member of a family—
(I) receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for the 6-month period ending on the hiring date, or
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(A), (B), (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977” and “supplemental nutrition assistance program” for “food stamp program”.
(II) receiving such assistance for at least 3 months of the 5-month period ending on the hiring date, in the case of a member of a family who ceases to be eligible for such assistance under section 6(o) of the Food and Nutrition Act of 2008.
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(B), (2)(O), substituted “Food and Nutrition Act of 2008” for “Food Stamp Act of 1977”.
Amended 1980, 1981, 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(D), (2)(O), substituted “supplemental nutrition assistance program benefits” for “food stamp” in introductory provisions.
- 1981 Pub L. 97–34, § 261(b)(4), added cl. (iv).
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(F), substituted “age 20” for “age 19”.
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(B) Participation information Notwithstanding any other provision of law, the Secretary of the Treasury and the Secretary of Agriculture shall enter into an agreement to provide information to designated local agencies with respect to participation in the supplemental nutrition assistance program.
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 4002(b)(1)(A), (2)(O), substituted “supplemental nutrition assistance program” for “food stamp program”.
(9) Qualified SSI recipient The term “qualified SSI recipient” means any individual who is certified by the designated local agency as receiving supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93–66) for any month ending within the 60-day period ending on the hiring date.
Amended 1981, 1983, 1996, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(c)(2), added par. (9). Former par. (9) redesignated (10).
- 1997 Pub. L. 105-33 Pub. L. 105–33 repealed Pub. L. 104–193, § 110(l)(1). See 1996 Amendment note below.
- 1996 Pub. L. 104-193 Pub. L. 104–193, § 110(l)(1), which directed amendment of par. (9) by striking all that follows “agency as” and inserting “being eligible for financial assistance under part A of title IV of the Social Security Act and as having continually received such financial assistance during the 90-day period which immediately precedes the date on which such individual is hired by the employer.”, was repealed by Pub. L. 105–33.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 102(l)(3), substituted “section 432(b)(1) or 445” for “section 432(b)(1)”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), added pars. (9) and (10) and redesignated former pars. (9) and (10) as (11) and (12), respectively.
(10) Long-term family assistance recipient The term “long-term family assistance recipient” means any individual who is certified by the designated local agency—
(A) as being a member of a family receiving assistance under a IV–A program (as defined in paragraph (2)(B)) for at least the 18-month period ending on the hiring date,
(i) as being a member of a family which ceased to be eligible for such assistance by reason of any limitation imposed by Federal or State law on the maximum period such assistance is payable to a family, and
(ii) as having a hiring date which is not more than 2 years after the date of such cessation.
Amended 1981, 1982, 1997, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(2), added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively. Former par. (12) redesignated (13).
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(c)(2), redesignated pars. (9) to (11) as (10) to (12), respectively.
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(c), inserted provision respecting nonapplicability of paragraph to individuals who begin work for the employer after December 31, 1982.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), added pars. (9) and (10) and redesignated former pars. (9) and (10) as (11) and (12), respectively.
(11) Hiring date The term “hiring date” means the day the individual is hired by the employer.
Amended 1981, 1983, 1984, 1997, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(2), added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively. Former par. (12) redesignated (13).
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(c)(2), redesignated pars. (9) to (11) as (10) to (12), respectively.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 712(n), made determination respecting membership of a qualified summer youth employee or youth participating in a qualified cooperative education program with respect to an employer applicable for purposes of determining whether such individual is a member of another targeted group with respect to such employer.
- 1983 Pub. L. 97-448 Pub. L. 97–448, § 102(l)(4), substituted “the earlier of the month in which such determination occurs or the month in which the hiring date occurs” for “the month in which such determination occurs”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), (c)(2), redesignated former par. (9) as (11), substituted “70 percent or less” for “less than 70 percent”, and provided for validity of any determination for 45-day period beginning on the date the determination is made. Former par. (11) redesignated (13).
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(12) Designated local agency The term “designated local agency” means a State employment security agency established in accordance with the Act of June 6, 1933, as amended (29 U.S.C. 49–49n).
Amended 1980, 1981, 1982, 1984, 1986, 1988, 1997, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(2), added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively. Former par. (12) redesignated (13).
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(d), substituted “28th day” for “21st day”.
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(c)(2), redesignated pars. (9) to (11) as (10) to (12), respectively.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 4010(d)(1), redesignated former cls. (ii) and (iii) as (i) and (ii), respectively, and struck out former cl. (i) which provided that subsection (a) shall be applied by substituting “85 percent” for “40 percent”.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1017(a), substituted “subsection (a)” for “subsection (a)(1)” in cl. (i).
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(b)(2)(B), in cl. (i), substituted “40 percent” for “50 percent”, struck out cl. (ii) which directed that subsecs. (a)(2) and (b)(3) were not to apply, redesignated cl. (iii) as cl. (ii), redesignated cl. (iv) as cl. (iii), and in cl. (iii) as so redesignated substituted “subsection (b)(3)” for “subsection (b)(4)”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 1041(c)(3), substituted “(or if later, on May 1 of the calendar year involved)” for “(as defined in paragraph (14))”.
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(4), (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), redesignated former pars. (10) and (11) as pars. (12) and (13), respectively. Former par. (12) redesignated (14).
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(viii), substituted “employers” for “employer”.
Cases: Manor Care v. United States, 630 F.3d 1377 (Fed. Cir. 2011)
(13) Special rules for certifications
Amended 1981, 1982, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(2), redesignated par. (12) as (13).
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(4), (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), redesignated former pars. (10) and (11) as pars. (12) and (13), respectively. Former par. (12) redesignated (14).
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(A) In general An individual shall not be treated as a member of a targeted group unless—
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(i) on or before the day on which such individual begins work for the employer, the employer has received a certification from a designated local agency that such individual is a member of a targeted group, or
(I) on or before the day the individual is offered employment with the employer, a pre-screening notice is completed by the employer with respect to such individual, and
(II) not later than the 28th day after the individual begins work for the employer, the employer submits such notice, signed by the employer and the individual under penalties of perjury, to the designated local agency as part of a written request for such a certification from such agency.
For purposes of this paragraph, the term “pre-screening notice” means a document (in such form as the Secretary shall prescribe) which contains information provided by the individual on the basis of which the employer believes that the individual is a member of a targeted group.
(B) Incorrect certifications If—
(i) an individual has been certified by a designated local agency as a member of a targeted group, and
(ii) such certification is incorrect because it was based on false information provided by such individual,
the certification shall be revoked and wages paid by the employer after the date on which notice of revocation is received by the employer shall not be treated as qualified wages.
(C) Explanation of denial of request If a designated local agency denies a request for certification of membership in a targeted group, such agency shall provide to the person making such request a written explanation of the reasons for such denial.
(D) Credit for unemployed veterans
Amended 2011
- 2011 Pub. L. 112-56 Pub. L. 112–56, § 261(c), added subpar. (D).
(i) In general Notwithstanding subparagraph (A), for purposes of paragraph (3)(A)—
(I) a veteran will be treated as certified by the designated local agency as having aggregate periods of unemployment meeting the requirements of clause (ii)(II) or (iv) of such paragraph (whichever is applicable) if such veteran is certified by such agency as being in receipt of unemployment compensation under State or Federal law for not less than 6 months during the 1-year period ending on the hiring date, and
(II) a veteran will be treated as certified by the designated local agency as having aggregate periods of unemployment meeting the requirements of clause (iii) of such paragraph if such veteran is certified by such agency as being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks (but less than 6 months) during the 1-year period ending on the hiring date.
(ii) Regulatory authority The Secretary may provide alternative methods for certification of a veteran as a qualified veteran described in clause (ii)(II), (iii), or (iv) of paragraph (3)(A), at the Secretary’s discretion.
(14) Credit allowed for unemployed veterans and disconnected youth hired in 2009 or 2010
Amended 1981, 1982, 2009
- 2009 Pub. L. 111-5 Pub. L. 111–5 added par. (14).
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(4), (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(f)(1)(A), substituted as definition for term “ ‘designated local agency’ means a State employment security agency established in accordance with the Act of June 6, 1933, as amended (29 U.S.C. 49–49n)” for “ ‘designated local agency’ means the agency for any locality designated jointly by the Secretary and the Secretary of Labor to perform certification of employees for employers in that locality”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(b)(2)(A), redesignated former par. (12) as (14).
(A) In general Any unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010 shall be treated as a member of a targeted group for purposes of this subpart.
(B) Definitions For purposes of this paragraph—
(i) Unemployed veteran The term “unemployed veteran” means any veteran (as defined in paragraph (3)(B), determined without regard to clause (ii) thereof) who is certified by the designated local agency as—
(ii) Disconnected youth The term “disconnected youth” means any individual who is certified by the designated local agency—
(I) as having attained age 16 but not age 25 on the hiring date,
(II) as not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date,
(III) as not regularly employed during such 6-month period, and
(IV) as not readily employable by reason of lacking a sufficient number of basic skills.
(15) Qualified long-term unemployment recipient The term “qualified long-term unemployment recipient” means any individual who is certified by the designated local agency as being in a period of unemployment which—
Amended 1981, 1982, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 142(b)(2), added par. (15).
- 1982 Pub. L. 97-248 Pub. L. 97–248, § 233(b)(4), (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(c)(1), added par. (15).
(e) Credit for second-year wages for employment of long-term family assistance recipients
Amended 1980, 1981, 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 105(e)(3), added subsec. (e).
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(e)(1), struck out subsec. (e) which set forth limitation that qualified first-year wages could not exceed 30 percent of FUTA wages for all employees.
- 1980 Pub. L. 96-222 Pub. L. 96–222, § 103(a)(6)(G)(ix), inserted “except as provided in subsection (h)(1)” after “the preceding sentence,”.
(1) In general With respect to the employment of a long-term family assistance recipient—
(A) the amount of the work opportunity credit determined under this section for the taxable year shall include 50 percent of the qualified second-year wages for such year, and
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(B) in lieu of applying subsection (b)(3), the amount of the qualified first-year wages, and the amount of qualified second-year wages, which may be taken into account with respect to such a recipient shall not exceed $10,000 per year.
(2) Qualified second-year wages For purposes of this subsection, the term “qualified second-year wages” means qualified wages—
(A) which are paid to a long-term family assistance recipient, and
(B) which are attributable to service rendered during the 1-year period beginning on the day after the last day of the 1-year period with respect to such recipient determined under subsection (b)(2).
(3) Special rules for agricultural and railway labor If such recipient is an employee to whom subparagraph (A) or (B) of subsection (h)(1) applies, rules similar to the rules of such subparagraphs shall apply except that—
(A) such subparagraph (A) shall be applied by substituting “$10,000” for “$6,000”, and
(B) such subparagraph (B) shall be applied by substituting “$833.33” for “$500”.
(f) Remuneration must be for trade or business employment
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(e)(2), substituted “any taxable year” for “any year” in pars. (1) and (2) and struck out par. (3), defining “year” which is covered in pars. (1) and (2).
(1) In general For purposes of this subpart, remuneration paid by an employer to an employee during any taxable year shall be taken into account only if more than one-half of the remuneration so paid is for services performed in a trade or business of the employer.
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(2) Special rule for certain determination Any determination as to whether paragraph (1), or subparagraph (A) or (B) of subsection (h)(1), applies with respect to any employee for any taxable year shall be made without regard to subsections (a) and (b) of section 52.
(g) United States Employment Service to notify employers of availability of credit The United States Employment Service, in consultation with the Internal Revenue Service, shall take such steps as may be necessary or appropriate to keep employers apprised of the availability of the work opportunity credit determined under this subpart.
Amended 1981, 1984, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(e)(1), substituted “work opportunity credit” for “targeted jobs credit”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 474(p)(2), substituted “the targeted jobs credit determined under this subpart” for “the credit provided by section 44B”.
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(f)(1)(B), substituted “United States Employment Service” for “Secretary of Labor” in heading and text.
(h) Special rules for agricultural labor and railway labor For purposes of this subpart—
(1) Unemployment insurance wages
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(A) Agricultural labor If the services performed by any employee for an employer during more than one-half of any pay period (within the meaning of section 3306(d)) taken into account with respect to any year constitute agricultural labor (within the meaning of section 3306(k)), the term “unemployment insurance wages” means, with respect to the remuneration paid by the employer to such employee for such year, an amount equal to so much of such remuneration as constitutes “wages” within the meaning of section 3121(a), except that the contribution and benefit base for each calendar year shall be deemed to be $6,000.
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(B) Railway labor If more than one-half of remuneration paid by an employer to an employee during any year is remuneration for service described in section 3306(c)(9), the term “unemployment insurance wages” means, with respect to such employee for such year, an amount equal to so much of the remuneration paid to such employee during such year which would be subject to contributions under section 8(a) of the Railroad Unemployment Insurance Act (45 U.S.C. 358(a)) if the maximum amount subject to such contributions were $500 per month.
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(2) Wages In any case to which subparagraph (A) or (B) of paragraph (1) applies, the term “wages” means unemployment insurance wages (determined without regard to any dollar limitation).
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(i) Certain individuals ineligible
Amended 1981
- 1981 Pub. L. 97-34 Pub. L. 97–34, § 261(d), added subsec. (i).
(1) Related individuals No wages shall be taken into account under subsection (a) with respect to an individual who—
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(A) bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity (determined with the application of section 267(c)),
Amended 1993, 2004, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(29), substituted “entity” for “entity,”.
- 2004 Pub. L. 108-311 Pub. L. 108–311, § 207(5)(A), substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.
- 1993 Pub. L. 103-66 Pub. L. 103–66, § 13302(d), inserted “, or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity,” after “of the corporation”.
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(B) if the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the estate or trust, or is an individual who bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2) to a grantor, beneficiary, or fiduciary of the estate or trust, or
Amended 2004
- 2004 Pub. L. 108-311 Pub. L. 108–311, § 207(5)(A), substituted “subparagraphs (A) through (G) of section 152(d)(2)” for “paragraphs (1) through (8) of section 152(a)”.
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(C) is a dependent (described in section 152(d)(2)(H)) of the taxpayer, or, if the taxpayer is a corporation, of an individual described in subparagraph (A), or, if the taxpayer is an estate or trust, of a grantor, beneficiary, or fiduciary of the estate or trust.
Amended 2004
- 2004 Pub. L. 108-311 Pub. L. 108–311, § 207(5)(B), substituted “152(d)(2)(H)” for “152(a)(9)”.
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(2) Nonqualifying rehires No wages shall be taken into account under subsection (a) with respect to any individual if, prior to the hiring date of such individual, such individual had been employed by the employer at any time.
Amended 1999
- 1999 Pub. L. 106-170 Pub. L. 106–170, § 505(b), struck out “during which he was not a member of a targeted group” before period at end.
(3) Individuals not meeting minimum employment periods
Amended 1986, 1996, 1997
- 1997 Pub. L. 105-34 Pub. L. 105–34, § 603(d)(2), amended heading and text of par. (3) generally. Prior to amendment, text read as follows: “No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either—
“(A) is employed by the employer at least 180 days (20 days in the case of a qualified summer youth employee), or
“(B) has completed at least 400 hours (120 hours in the case of a qualified summer youth employee) of services performed for the employer.”
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(c), amended par. (3) generally. Prior to amendment, par. (3) read as follows: “Individuals not meeting minimum employment period.—No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either—
“(A) is employed by the employer at least 90 days (14 days in the case of an individual described in subsection (d)(12)), or
“(B) has completed at least 120 hours (20 hours in the case of an individual described in subsection (d)(12)) of services performed for the employer.”
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1701(c), added par. (3).
(A) Reduction of credit for individuals performing fewer than 400 hours of service In the case of an individual who has performed at least 120 hours, but less than 400 hours, of service for the employer, subsection (a) shall be applied by substituting “25 percent” for “40 percent”.
(B) Denial of credit for individuals performing fewer than 120 hours of service No wages shall be taken into account under subsection (a) with respect to any individual unless such individual has performed at least 120 hours of service for the employer.
(j) Election to have work opportunity credit not apply
Amended 1984, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1201(e)(5), substituted “Work opportunity credit” for “Targeted jobs credit” in heading.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 1041(c)(1), added subsec. (j) relating to treatment of successor employers, and employees performing services for other persons.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 474(p)(3), added subsec. (j) relating to election to have targeted jobs credit not apply.
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(1) In general A taxpayer may elect to have this section not apply for any taxable year.
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(2) Time for making election An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).
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(3) Manner of making election An election under paragraph (1) (or revocation thereof) shall be made in such manner as the Secretary may by regulations prescribe.
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(k) Treatment of successor employers; treatment of employees performing services for other persons
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1878(f)(1), redesignated subsec. (j) added by section 1041(c)(1) of Pub. L. 98–369 and relating to treatment of successor employers, and employees performing services for other persons, as subsec. (k).
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(1) Treatment of successor employers Under regulations prescribed by the Secretary, in the case of a successor employer referred to in section 3306(b)(1), the determination of the amount of the credit under this section with respect to wages paid by such successor employer shall be made in the same manner as if such wages were paid by the predecessor employer referred to in such section.
(2) Treatment of employees performing services for other persons No credit shall be determined under this section with respect to remuneration paid by an employer to an employee for services performed by such employee for another person unless the amount reasonably expected to be received by the employer for such services from such other person exceeds the remuneration paid by the employer to such employee for such services.