5884 OMB No, 1545-0219
Form Jobs Credit 19
Department of the Treasury > Attach to your return. Attachment
Internal Revenue Service Sequence No. 77
Name(s) as shown on return Identifying number
[Part |i Current Year Jobs Credit
1 Enter the total qualified wages paid or incurred during the tax year for services of employees who are
certified as members of atargetedgroup . . . . Soe ee bee soe 1
2 Enter 40% of line 1 here. You must subtract this amount from the deduction on your return for salaries
and wages. (Members of a group of trades or businesses under common control, see instructions.) 2
Tryou area— Then enter toal of eurent year jobs credit(s) from—
3 Flow-through jobs credits ‘a Shareholder . Schedule K-1 (Form 1120S), lines 12d, 12e, or 13
tom ter ents Suey «| Etibeafeam pms eerie}. 8
4 Patron Written statement from cooperative tt
4 Current year jobs credit. Add lines 2 and 3. s corporations, partnerships, estates, trusts, and
cooperatives, see instructions.) . . woe 4
See General Instruction B, Who Must File Form 3800, General Business Credit,
DERE Tax Liability Limitation
5a Individuals—Enter amount from Form 1040, line40 . . .
b Corporations—Enter amount from Form 1120, Schedule J, line 3 (or Form 1120. A, Part, line 1) .
¢ Other filers—Enter regular tax before credits from yourretun. . . . . . .
6 Credits that reduce regular tax before the jobs credit:
a Credit for child and dependent care expenses (Form 2441)... . . 6a
Credit for the elderly or the disabled (Schedule R, Form 1040). . . . 6b
¢ Foreign tax credit(Form1116orForm1118) .......44 Ge
d Possessions tax credit (Form 5735)... 1... ew ee ee 6d
e Mortgage interest credit (Form 8396). . . . 1... 4.4... .{ 60
f Credit for fuel fromanonconventionalsource . . . . . . . . . »L6f
g Orphan drug credit (Form 6765). . . . . . . LSE
h Total credits that reduce regular tax before the jobs ‘credit—Add lines 6a through6g. . . . . . . [6h
7 Netregulartax—Subtractline6hfromline5. 2 6 6 0 ee ee ee ee ee LZ
8 Tentative minimum tax:
a Individuals—Enter amount from Form6251,linel7 . . 6.
b Corporations—Enter amount from Form 4626, line13_ 2... bee ee sone 8
c Estates and trusts—Enter amount from Form 8656, line 37 . .
9 Net income tax:
a Individuals—Add line 7 above, and line 19 of Form 6251. Enter the total
b Corporations—Add line 7 above, and line 15 of Form 4626, Enterthetotal f. . . . . 1 we 9
¢ Other filers—See instructions . . . a noe oo .
10 If line 7 is more than $25,000, enter 25% of the excess (see instructions) ee ee ee $20
11. Subtract line 8 or line 10, whichever is greater, from line 9. Enter the result. If less than zero, enter zero i
12 Total allowed jobs credit—Enter the smaller of line 4 or line 11. This is your General Business Credit
tor 1990. Enter here and on Form 1040, line 44; Form 1120, Schedule J, line 4e; Form 1120-A, Part |,
line 2a; or the appropriate line of otherincometaxreturns . ...... ~. o. 12

Paperwork Reduction Act Notice.—We ask for Recordkeeping. . . . .3hrs.,50min. wewouldbe ener hear from you. You can
the information on this form to carry out the Learning about the write to both the IRS and the Office of

Internal Revenue laws of the United States, You law or te form 35 min, Management and Budget at the addresses
are required to give us this information, We need soho sees "listed in the instructions of the tax return with
It to ensure that you are complying with these " Preparing and which this form Is filed.

laws and to allow us to figure and collect the right sending the form

amount of tax. 8 eM fOIRS Se... sys 4Lmin, lems You Should Note

The time needed to complete and file this
form will vary depending on individual
circumstances, The estimated average time is:

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form more simple,

© The targeted jobs credit has been extended for
qualified wages paid or accrued to employees who
begin work for the. employer on or before
December 31, 1991.

Form 5884 (1990)


Form 5884 (1990)

Page 2

@ If any of the credit claimed on this form is from
a passive activity, you must stop at line 4 and go
to Form 3800, General Business Credit, to claim
your 1990 jobs credit.

General Instructions
(Section references are to the Internal Revenue
Code.)

A. Purpose of Form.— Use Form 5884 if you
had jobs credit employees and take an income
tax credit for wages you paid or accrued for them
during the tax year.

Mutual savings institutions, regulated
investment companies, and real estate
investment trusts can take a limited credit. See
section 52(e) and the related regulations.

You can claim or elect not to claim the jobs
credit any time within 3 years from the due date
of your return on either your original return or on
an amended return.

B. Who Must File Form 3800, General
Business Credit.—The general business credit
consists of the investment credit, jobs credit,
credit for alcohol used as fuel, research credit,
tow-income housing credit, and disabled access
credit. If you have more than one of these credits
for 1990, a carryback or carryforward of any of
these credits, or a jobs credit from a passive
activity, you must attach the appropriate credit
forms and summarize them on Form 3800. If you
have only a 1990 jobs credit and the credit is not
from a passive activity, you do not have to file
Form 3800 this year.

C. How To Figure the Credit.—In general,
figure your jobs credit based on the employee's
wages subject to the Federal Unemployment Tax
Act (FUTA). Jobs credit wages, however, are
limited to $6,000 for each employee ($3,000 for
each qualified summer youth employee). Special
tules apply in the following cases:

(1) You can take a jobs credit for agricultural
employees who meet the other tests if their
services qualify under FUTA as agricultural labor
during more than half of any pay period. Base
your credit for each employee on the first $6,000
in wages subject to social security (FICA) tax pald
or accrued for that person during the year,

(2) You can take a credit for railroad
employees who meet the other tests if their
wages qualify under the Railroad Unemployment.
Insurance Act (RUIA). Base your credit for each
employee on the first $6,000 in wages subject to
RUIA tax paid or accrued for that person during
the year.

(3) Wages for youths in a cooperative
education program are not subject to FUTA, but
include their wages in the amount you use to
figure your jobs credit. Base your jobs credit for
each youth on the first $6,000 in wages you paid
or accrued for that person during the year.

Your credit is based on a percentage of the
wages for each employee in the following
targeted groups:

@ Referrals by a vocational rehabilitation
program.

@ Economically disadvantaged youths.

Economically disadvantaged Vietnam-era
veterans.

@ Supplemental Security Income (SSI).
recipients.

© General assistance recipients.

© Youths in a cooperative education program,
who belong to an economically

disadvantaged family.

e Economically disadvantaged ex-convicts,
Eligible work incentive employees.
© Qualified summer youth employees, age 16.

‘or 17. who work for you between May 1 and

September 15.

In addition, to claim a jobs credit on an
employee's wages:

(1) more than half the wages received from you
must be for working in your trade or business;

(2) the employee must be certified, as
explained below, as belonging to a targeted
group;

(3) you may not claim a credit on wages that
were repaid by a federally funded on-the-job
training program, or for which you received work
supplementation payments under the Social
Security Act;

(4) the employee cannot be your relative or
dependent (see section 51(i));

(5) the employee cannot be your rehired
employee if he or she was not a targeted group
member when employed earlier;

(6) the employee must have worked for you for
at least 90 days (14 days for a summer youth
employee) or completed at least 120 hours of
services (20 hours for a summer youth
employee); and

(7) the wages cannot be for services of
replacement workers during a strike or walkout,

Certification is done by a local agency,
generally an office of the State Employment _

ecurity Agency (Jobs Service), The agency gives
the employer a form certifying that the employee
is in a targeted group. The certification must be
completed or the employer must request, in
writing, a certification from the certifying agency
by the date the employee begins work (or within 5
days if the employer has received a written
preliminary determination that the employee is in
a targeted group).

Certification of a Youth in a Cooperative
Education Program.—The certification is
completed by the school administering the
cooperative program. The school gives the
employer a completed Form 6199, Certification
of Youth Participating in a Qualified Cooperative
Education Program.

Specific Instructions

Part!

Line 1.—Enter the first-year wages paid to
qualified employees. The wages are limited to
$6,000 of first-year wages paid. The wages for

ualified summer youth employees are limited to
$3,000, If you paid first-year wages to a qualified
employee last year, subtract those wages from
the $6,000 limit.

For example, if a jobs credit employee began.
working in your business on September 1, 1989,
and you are a calendar year taxpayer, you would
have figured your 1989 jobs credit based on the
first-year wages you paid between September 1
and December 31, 1989. You would have figured
your 1990 credit on the rest of the first-year
‘wages you paid between January 1 and August

For each qualified summer youth employee,
wages are limited to those paid for any 90-day
period between May 1 and September 15, up to
$3,000. You cannot claim a credit for an
employee who was your employee in any prior
period. Also, the summer youth employee must
have worked for you at least 14 days, or
completed at least 20 hours of service.

Controlled groups: The group member
proportionately contributing the most first-year
wages figures the group credit in Part | and skips
Part Il. See sections 52(a) and 1563.

On separate Forms 5884, that member and
every other member of the group should skip line
1 and enter its share of the group credit on line 2.
Each member then completes lines 3 through 12
on its separate form. Each group member must
attach to its Form 5884 a schedule showing how
the group credit was divided among all the
members. The members share the credit in the
same proportion that they contributed qualifying
wages.

If you were allocated a jobs credit from a flow-
through entity, skip lines 1 and 2 for that credit
and enter it on line 3.

Line 2.—In general, you must subtract your
current year jobs credit on line 2 from the
deduction on your return for salaries and wages
you paid or owe for 1990. This is true even if you
cannot take the full credit this year and must
carry part of it back or forward.

An exception to this rule applies if you
capitalized any salaries and wages on which you
figured the credit. In this case, reduce your
depreciable basis by the amount of the jobs credit
‘on those salaries and wages.

Another exception involves the full absorption
method of inventory costing which requires you to
reduce your basis in inventory for the jobs credit.

If either exception applies to you, attach a
statement to your return to explain why the
amount on line 2 differs from the amount you
‘subtract from your salary and wage deduction.
Line 3.—Enter the amount of credit that was
allocated to you as a shareholder, partner,
beneficiary, or patron of a cooperative.

Line 4.—If you have a credit from a passive
activity, stop here and go to Form 3800.

Estates and trusts: The jobs credit on line 4 is
allocated between the estate or trust and the
beneficiaries in proportion to the income
allocable to each. On the dotted line to the left of
the amount on line 4, the estate or trust should
enter its part of the total jobs credit. Label it
“1041 PORTION” and use this amount in Part Il
to figure the jobs credit to take on Form 1041.

S corporations and partnerships: Prorate the
jobs credit on line 4 among the shareholders or
partners. Attach Form 5884 to the return and on
Schedule K-1 show the credit for each
shareholder or partner.

Cooperatives: Most tax-exempt organizations
cannot take the jobs credit; but a cooperative
described in section 1381(a) takes the jobs credit
to the extent it has tax liability. Any excess is
shared among its patrons.

Carrybacks and carryforwards: \f you cannot
use part of the credit because of the tax liability
limitations, you may carry it back 3 years, then
forward 15 years.

See section 383 for the limitation on the
amount of any excess general business tax
credits of a loss corporation for any tax year
ending after a post-1986 ownership change that
may be used in a post-change year.

Part Il

Line 9c, Other filers.—Enter the sum of line 7
and your alternative minimum tax from
whichever alternative minimum tax form you file.
Line 10. Limitation.—See section 38(c)(3) for
special rules for married couples filing separate
returns, for controlled corporate groups, and for
estates and trusts.