Form 5884

(Rev. April 2009)

Department of the Treasury 

Internal Revenue Service

Work Opportunity Credit

© Attach to your tax return.

OMB No. 1545-0219

2008

Attachment 

Sequence No. 77

Name(s) shown on return Identifying number

1 Enter on the applicable line below the total qualified first- or second-year wages paid or incurred 

during the tax year, and multiply by the percentage shown, for services of employees who are 

certified (if required) as members of a targeted group.

a Qualified first-year wages of employees who worked for you 

at least 120 hours but fewer than 400 hours . . . . . $ 3 25% (.25) 1a

b Qualified first-year wages of employees who worked for you 

at least 400 hours . . . . . . . . . . . . . . $ 3 40% (.40) 1b

c Qualified second-year wages of employees certified as 

long-term family assistance recipients . . . . . . . $ 3 50% (.50) 1c

2 Add lines 1a, 1b, and 1c. See instructions for the adjustment you must make to salaries and wages 2

3 Work opportunity credit from partnerships, S corporations, cooperatives, estates, and trusts . 3

4 Add lines 2 and 3. Partnerships and S corporations, report this amount on Schedule K; all 

others, go to line 5 . . . . . . . . . . . . . . . . . . . . . . . . . 4

5 Work opportunity credit included on line 4 from passive activities (see instructions) . . . . 5 

6 Subtract line 5 from line 4 . . . . . . . . . . . . . . . . . . . . . . . 6 

7 Work opportunity credit allowed for 2008 from a passive activity (see instructions) . . . . . 7 

8 Carryforward of any work opportunity credit that originated in a tax year that began after 2006 

and carryforward from 2007 of the New York Liberty Zone business employee credit . . . . 8 

9 Carryback of the work opportunity credit from 2009 (see instructions) . . . . . . . . . 9 

10 Add lines 6 through 9. Cooperatives, estates, and trusts, continue on to line 11. All others, report 

this amount on Form 3800, line 29b . . . . . . . . . . . . . . . . . . . . 10 

11 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust (see 

instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 

12 Cooperatives, estates, and trusts, subtract line 11 from line 10. Report this amount on Form

3800, line 29b . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

General Instructions

Section references are to the Internal Revenue Code unless 

otherwise noted.

What’s New

● The period for hiring a Hurricane Katrina employee is extended 

from a 2- to a 4-year period beginning on August 28, 2005.

● Food stamp recipients are now referred to as Supplemental 

Nutrition Assistance Program (SNAP) recipients.

● The tax liability limit is no longer figured on this form; instead, 

it must be figured on Form 3800, General Business Credit.

● The American Recovery and Reinvestment Act of 2009 added 

two targeted groups for certain unemployed veterans and 

disconnected youth who begin work after 2008 and before 

2011. 

Purpose of Form

Use Form 5884 to claim the work opportunity credit for qualified 

first- or second-year wages you paid to or incurred for targeted 

group employees during the tax year. Your business does not 

have to be located in an empowerment zone, renewal 

community, or rural renewal county to qualify for this credit.

You can claim or elect not to claim the work opportunity 

credit any time within 3 years from the due date of your return 

on either your original return or an amended return.

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13570D Form 5884 (2008) (Rev. 4-2009)
Form 5884 (2008) (Rev. 4-2009) Page 2

How To Claim the Credit

Generally, you must request and be issued a certification for 

each employee from the state employment security agency 

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

of a targeted group. You must receive the certification by the 

day the individual begins work or complete Form 8850, PreScreening Notice and Certification Request for the Work 

Opportunity Credit, on or before the day you offer the individual 

a job.

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

individual and submitted to the SESA by the 28th calendar day 

after the individual begins work (by August 17, 2009, for 

unemployed veterans and disconnected youth hired after 2008 

and before July 17, 2009). If the SESA denies the request, it will 

provide a written explanation of the reason for denial. If a 

certification is revoked because it was based on false 

information provided by the worker, wages paid or incurred after 

the date you receive the notice of revocation do not qualify for 

the credit.

Hurricane Katrina employee. A Hurricane Katrina employee is 

an employee who had a main home in the core disaster area on 

August 28, 2005, and, within a 4-year period beginning on that 

date, was hired for a job whose principal place of employment is 

in the core disaster area. The certification requirements 

described above do not apply to Hurricane Katrina employees. 

Instead, the worker must show the employer reasonable 

evidence that the worker is a Hurricane Katrina employee. An 

employer may use Form 8850 to accept reasonable evidence 

that the worker is a Hurricane Katrina employee. If the employer 

discovers that the worker is not a Hurricane Katrina employee, 

wages paid or incurred after the date of discovery will not 

qualify for the credit.

Targeted group employee. An employee is a member of a

targeted group if he or she is a:

● Hurricane Katrina employee,

● Long-term family assistance recipient hired after December 

31, 2006 (if hired before January 1, 2007, see Form 8861, 

Welfare-to-Work Credit),

● Qualified recipient of Temporary Assistance for Needy Families 

(TANF),

● Qualified veteran,

● Qualified ex-felon,

● Designated community resident,

● Vocational rehabilitation referral,

● Summer youth employee,

● SNAP recipient, 

● SSI recipient, 

● Unemployed veteran, or

● Disconnected youth.

See the Instructions for Form 8850 (Rev. April 2009) and 

section 51(d) for details and restrictions.

Qualified Wages

Wages qualifying for the credit generally have the same 

meaning as wages subject to the Federal Unemployment Tax 

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

than half of any pay period qualifies under FUTA as agricultural 

labor, that employee’s wages subject to social security and 

Medicare taxes are qualified wages. For a special rule that 

applies to railroad employees, see section 51(h)(1)(B). Qualified 

wages for any employee must be reduced by the amount of any 

work supplementation payments you received under the Social 

Security Act for the employee.

The amount of qualified wages for any employee is zero if:

● The employee did not work for you for at least 120 hours,

● The employee worked for you previously, unless the employee 

is a Hurricane Katrina employee who was not in your 

employment on August 28, 2005, and this is your first hire of the 

employee after that date,

● The employee is your dependent,

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

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

were for working in your trade or business.

Qualified wages do not include:

● Wages paid to or incurred for any employee during any period 

for which you received payment for the employee from a 

federally funded on-the-job training program;

● Wages paid to or incurred for a summer youth employee for 

services performed while the employee lived outside an 

empowerment zone or renewal community;

● Wages paid to or incurred for a designated community 

resident for services performed while the employee lived outside 

an empowerment zone, renewal community, or rural renewal 

county;

● Wages paid to or incurred for services performed by a summer 

youth employee before or after any 90-day period between May 

1 and September 15; and

● Wages for services of replacement workers during a strike or 

lockout.

Member of Controlled Group or Business 

Under Common Control

For purposes of figuring the credit, all members of a controlled 

group of corporations (as defined in section 52(a)) and all 

members of a group of businesses under common control (as 

defined in section 52(b)), are treated as a single taxpayer. As a 

member, compute your credit based on your proportionate 

share of qualified wages giving rise to the group’s work 

opportunity credit. Enter your share of the credit on line 2. 

Attach a statement showing how your share of the credit was 

figured, and enter “See attached” next to the entry space for 

line 2.

Specific Instructions

Current Year Credit

Lines 1a, 1b, and 1c

Enter on the applicable line and multiply by the percentage 

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

incurred for employees who are members of a targeted group. 

Qualified first-year wages are qualified wages you paid to or 

incurred for work performed during the 1-year period beginning 

on the date the individual begins work for you. Qualified 

second-year wages are qualified wages you paid to or incurred 

for certified long-term family assistance recipients for work 

performed during the 1-year period beginning on the day after 

the last day of the 1-year wage period.

The amount of qualified first-year wages and the amount of 

qualified second-year wages that may be taken into account for 

any employee certified as a long-term family assistance 

recipient is limited to $10,000 per year. The amount of qualified 

first-year wages that may be taken into account for any 

employee certified as a qualified veteran entitled to 

compensation for a service-connected disability and who, 

during the 1-year period ending on the hiring date, was either (a) 

discharged or released from active duty in the U.S. Armed 

Forces, or (b) unemployed for a period or periods totaling at 

least 6 months, is limited to $12,000. The amount of qualified 
Form 5884 (2008) (Rev. 4-2009) Page 3

first-year wages that may be taken into account for any 

employee certified as a summer youth employee is limited to 

$3,000. The amount of qualified first-year wages that may be 

taken into account for an employee certified (if required) as a 

member of any other targeted group is $6,000. 

Successor employer. For successor employers, the 1- or 2-

year period begins on the date the employee began work for the 

previous employer and any qualified first- or second-year wages 

paid or incurred by the successor employer are reduced by the 

qualified first- or second-year wages paid or incurred by the 

previous employer. See section 51(k)(1) and Regulations section 

1.51-1(h).

A successor employer is an employer that acquires 

substantially all of the property used in a trade or business (or a 

separate unit thereof) of another employer (the previous 

employer) and immediately after the acquisition, the successor 

employs in his or her trade or business an individual who was 

employed immediately prior to the acquisition in the trade or 

business of the previous employer.

Line 2

In general, you must reduce your deduction for salaries and 

wages by the amount on line 2. This is required even if you 

cannot take the full credit this year and must carry part of it 

back or forward. If you capitalized any costs on which you 

figured the credit, reduce the amount capitalized by the credit 

attributable to these costs.

Line 3

Enter the amount of credit that was allocated to you as a 

partner, shareholder, patron of a cooperative, or beneficiary.

Line 5

Enter the amount included on line 4 that is from a passive 

activity. Generally, a passive activity is a trade or business in 

which you did not materially participate. Rental activities are 

generally considered passive activities, whether or not you 

materially participate. For details, see Form 8582-CR, Passive 

Activity Credit Limitations (for individuals, estates, and trusts), or 

Form 8810, Corporate Passive Activity Loss and Credit 

Limitations (for corporations).

Line 7

Enter the passive activity work opportunity credit allowed for 

2008 from Form 8582-CR or Form 8810.

Line 8

Use line 8 to show any carryforward of the work opportunity 

credit from 2007. For carryforwards of the credit from years 

prior to 2007, show such carryforwards on line 6 of Form 3800.

Also use line 8 to show any carryforward from 2007 of the 

New York Liberty Zone business employee credit. On the dotted 

line next to line 8, enter “From Form 8884” and the amount.

Line 9

Use line 9 to show any carryback if you amend your 2008 return 

to carry back an unused work opportunity credit from 2009.

Line 11

Cooperatives. A cooperative described in section 1381(a) must 

allocate to its patrons the credit in excess of its tax liability limit. 

Therefore, to figure the unused amount of the credit allocated to 

patrons, the cooperative must first figure its tax liability. While 

any excess is allocated to patrons, any credit recapture applies 

as if the cooperative had claimed the entire credit.

Estates and trusts. Allocate the work opportunity credit on line 

10 between the estate or trust and the beneficiaries in the same 

proportion as income was allocated and enter the beneficiaries 

share on line 11.

Paperwork Reduction Act Notice. We ask for the information 

on this form to carry out the Internal Revenue laws of the United 

States. You are required to give us the information. We need it 

to ensure that you are complying with these laws and to allow 

us to figure and collect the right amount of tax.

You are not required to provide the information requested on 

a form that is subject to the Paperwork Reduction Act unless 

the form displays a valid OMB control number. Books or 

records relating to a form or its instructions must be retained as 

long as their contents may become material in the 

administration of any Internal Revenue law. Generally, tax 

returns and return information are confidential, as required by 

section 6103.

The time needed to complete and file this form will vary 

depending on individual circumstances. The estimated burden 

for individual taxpayers filing this form is approved under OMB 

control number 1545-0074 and is included in the estimates 

shown in the instructions for their individual income tax return. 

The estimated burden for all other taxpayers who file this form is 

shown below.

Recordkeeping . . . . . . . . . . . 5 hr., 1 min.

Learning about the law 

or the form . . . . . . . . . . . . . . . . 1 hr.

Preparing and sending 

the form to the IRS . . . . . . . . . . 1 hr., 7 min.

If you have comments concerning the accuracy of these time 

estimates or suggestions for making this form simpler, we would 

be happy to hear from you. See the instructions for the tax 

return with which this form is filed.