OMB No. 1545-0219

Form 5884 Work Opportunity Credit

Department of the Treasury

Internal Revenue Service © Attach to your return. Attachment

Sequence No. 77

Name(s) shown on return Identifying number

Current Year Credit (Members of a controlled group, see instructions.)

1 Enter the total qualified first-year wages paid or incurred during the tax year and multiply by the

percentage shown for services of employees who are certified as members of a targeted group and

who began work for you:

1a

Current year credit. Add lines 1a, 1b, and 1c. You must subtract this amount from your deduction for

salaries and wages

2

2

If you are a— Then enter total of current year work opportunity credit(s) from—

Schedule K-1 (Form 1120S), lines 12d, 12e, or 13

Schedule K-1 (Form 1065), lines 12c, 12d, or 13

Schedule K-1 (Form 1041), line 14

Written statement from cooperative

a Shareholder

b Partner

c Beneficiary

d Patron

Work opportunity

credits from

flow-through

entities

3

3

Total current year work opportunity credit. Add lines 2 and 3. (S corporations, partnerships, estates,

trusts, cooperatives, regulated investment companies, and real estate investment trusts, see

instructions.)

4

4

Tax Liability Limit (See Who Must File Form 3800 to find out if you complete Part II or file Form 3800.)

Form 5884 (1997)

Part I

Part II

%

Cat. No. 13570D

● Individuals. Enter amount from Form 1040, line 39

● Corporations. Enter amount from Form 1120, Schedule J, line 3 (or Form 1120-A, Part I, line 1) 5

● Other filers. Enter regular tax before credits from your return

6a Credit for child and dependent care expenses (Form 2441, line 9) 6a

b Credit for the elderly or the disabled (Schedule R (Form 1040), line 20) 6b

6e

Foreign tax credit (Form 1116, line 32, or Form 1118, Sch. B, line 12)

e

6f f

g Possessions tax credit (Form 5735) 6g

6i

h Credit for fuel from a nonconventional source

j

Qualified electric vehicle credit (Form 8834, line 19)

6j Add lines 6a through 6i

7 Net regular tax. Subtract line 6j from line 5 7

8 Alternative minimum tax:

● Individuals. Enter amount from Form 6251, line 28

● Corporations. Enter amount from Form 4626, line 15 8

● Estates and trusts. Enter amount from Form 1041, Schedule I, line 42

10 Tentative minimum tax (see instructions):

● Individuals. Enter amount from Form 6251, line 26

10

● Corporations. Enter amount from Form 4626, line 13

● Estates and trusts. Enter amount from Form 1041,

Schedule I, line 38

11 If line 7 is more than $25,000, enter 25% (.25) of the excess (see

instructions)

13 Subtract line 12 from line 9. If zero or less, enter -0- 13

14 Work opportunity credit allowed for current year. Enter the smaller of line 4 or line 13 here and

on Form 1040, line 44; Form 1120, Schedule J, line 4d; Form 1120-A, Part I, line 2a; Form 1041,

Schedule G, line 2c; or the applicable line of your return 14

%

%

Mortgage interest credit (Form 8396, line 11)

d 6d

5 Regular tax before credits:

9 Net income tax. Add lines 7 and 8 9

12 Enter the greater of line 10 or line 11 12

%

11

1997

Adoption credit (Form 8839, line 10)

c 6c

After September 30, 1996, and before October 1, 1997 $ 3 35% (.35)

After September 30, 1997, and before July 1, 1998, and worked

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

After September 30, 1997, and before July 1, 1998, and worked

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

a

b

c

1b

1c

District of Columbia first-time homebuyer credit (Form 8859)

i

6h

For Paperwork Reduction Act Notice, see page 4.
Form 5884 (1997) Page 3

● Qualified food stamp recipient.

See Form 8850 and section 51(d) for details and

restrictions.

● More than half the wages received from you must be for

working in your trade or business.

● You may not claim a credit on wages that were paid to any

employee during any period for which you received payment

for the employee from a federally funded on-the-job training

program.

● The employee cannot be your relative or dependent. See

section 51(i) for other restrictions.

● The employee cannot be your rehired employee if he or

she was not a targeted group member when employed

earlier.

● For individuals who began work after September 30, 1996,

and before October 1, 1997, the employee must have

worked for you for at least 180 days or completed at least

400 hours of service (20 days or 120 hours for a qualified

summer youth employee).

● The wages cannot be for services of replacement workers

during a strike or lockout.

Qualified first-year wages are qualified wages for work

performed during the 1-year period beginning on the date

the individual begins work for you. The following rules apply

in determining qualified wages:

● Only the first $6,000 of wages paid or incurred during the

tax year for each employee are taken into account.

Specific Instructions

An employee is a member of a targeted group if he or she

is a:

● Qualified recipient of aid to families with dependent

children (AFDC) or successor program.

● Qualified veteran.

● Qualified ex-felon.

● High-risk youth.

● Vocational rehabilitation referral.

● Qualified summer youth employee.

Lines 1a through 1c. Enter on the applicable line (1a, 1b, or

1c) the total qualified first-year wages paid to employees

certified as members of a targeted group, based on when the

employee began work and the number of hours that

employee worked for you. Multiply the wages you enter on

each line by the percentage shown on that line.

Note: If you only have a credit allocated to you from a

flow-through entity, skip lines 1 and 2 and go to line 3.

● Wages qualifying for the credit generally have the same

meaning as wages subject to the Federal Unemployment Tax

Act (FUTA). For agricultural employees, if the work performed

by any employee during more than half of any pay period

qualifies under FUTA as agricultural labor, the first $6,000 of

that employee’s wages subject to social security and

Medicare taxes are taken into account. For a special rule that

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

● For each qualified summer youth employee, wages are

limited to those paid or incurred for any 90-day period

between May 1 and September 15 and may not exceed

$3,000. You cannot claim a credit for an employee who was

your employee in a prior period.

● You cannot include wages paid or incurred to a high-risk

or qualified summer youth employee for services performed

while the employee lived outside an empowerment zone or

enterprise community.

Section references are to the Internal Revenue Code.

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 on an amended return.

To claim the work opportunity credit, the employer 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. The employer must receive the certification

by the day the individual begins work, or must complete

Form 8850 by the day the employer offers the individual a

job.

How To Claim the Credit

Purpose of Form

Use Form 5884 if you had targeted group employees and

claim the work opportunity credit for wages you paid or

incurred to them during the tax year.

Changes To Note

The Taxpayer Relief Act of 1997 (the Act) extended the work

opportunity credit for 9 months to cover individuals who

begin work for the employer before July 1, 1998. The Act

also made the following changes effective for individuals who

begin work for the employer after September 30, 1997:

● Added a new targeted group (qualified supplemental

security income (SSI) recipients).

● Changed the requirements for two targeted groups

(qualified AFDC or successor program recipients and

qualified veterans).

● Made the credit a two-tiered credit based on the number

of hours the individual is employed. The number-of-daysemployed requirement has been eliminated. For details, see

qualified wages in the instructions for lines 1a through 1c

below.

● Beginning January 1, 1998, parts of Washington, DC, are

treated as an empowerment zone. Individuals residing in

those areas may qualify as members of the high-risk youth

and qualified summer youth employee targeted groups.

● For individuals who began work after September 30, 1997,

and before July 1, 1998, the employee must have worked for

you for at least 120 hours. For employees who have worked

at least 120 hours but fewer than 400 hours, the credit rate

is 25 percent. For employees who have worked at least 400

hours, the credit rate is 40 percent.

General Instructions

If the employer completes Form 8850, it must be signed by

the individual and the employer and submitted to the SESA

by the 21st day after the individual begins work. If the SESA

denies a certification 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 after the date the notice of

revocation is received by the employer do not qualify for the

credit.

● Qualified SSI recipient (for individuals who begin work after

September 30, 1997).

For more details on the targeted groups, see the

instructions for Form 8850, Pre-Screening Notice and

Certification Request for the Work Opportunity and

Welfare-to-Work Credits.

● Any work supplementation payments you received under

the Social Security Act reduce the amount of wages

qualifying for the credit.