5884 OMB No. 1545-0219
Form Jobs Credit 1985
Department of the Treasury
Internal Revenue Service > Attach to your tax return. 77
Name(s) as shown on return Identifying number
TEE] Jobs Credit
1 Enter the number of employees and total qualified wages paid or incurred during the tax year (up to
$6,000 for each employee for each of the first two years) for services of employees who are certified
as members of a targeted group. See instructions for special rules on qualified summer youth
employees.
‘Number of employees Total qualified wages
First year Do not include sum- } (a) (b)
Second year | mer youth employees (c) (d)
Qualified summer youth employees (e) (f)
2 Enter 50% of line 1(b) 2
3 Enter 25% of line 1(d) 3
4 Enter 85% of line 1(f) 4
5 Current year jobs credit—Add lines 2, 3, and 4. Enter here and include on n Schedule c (Form 1040),
line 29b; Form 1120, line 13(b), page 1; or the corresponding line on other returns. (Members of a
group of trades or businesses under common control, see Specific Instructions.) eee ee |
It you are a— Then enter total of current year jobs credit(s) from—
6 _ Flow-through jobs credits @ Shareholder Schedule 6-1 (Form 11208) fine 10»
from other entities . Beneficiary Schedule K.2 form Toast tine 10 6
d Patron Gee instructions for line 6d).
7 Totaljobs credit for current year—Add lines 5 and 6 G corporations, partnerships, estates, trusts, and
cooperatives, see instructions for line 7.) . 7

Note: If you have a 1985 investment credit (Form 3468), credit for alcohol used as fuel Form 6478), or employee stock ownership plan
(ESOP) credit (Form 8007) in addition to your 1985 jobs credit, or if you have a carryback or carryforward of any of these credits,

stop here and go to Form 3800, General Business Credit, to claim your 1985 jobs credit. If you have only a 1985 jobs credit, you may

continue with lines 8 through 13 to claim your credit.

GE) Tax Liability Limitation

8 a Individuals—From Form 1040, enter amount from line 46.
b Corporations—From Form 1120, Schedule J, enter tax from line 3 (or Form 1120. A, ‘part |, line 1 8
¢ Other filers—Enter income tax before credits from return
9 a Individuals—From Form 1040, enter credit from line 47, plus any orphan drug, nonconventional
source fuel, and research credits included on line 49 .
b Corporations—From Form 1120, Schedule J, enter credits from lines 4(a) through ae) (Form 9
1120-A filers, enter zero) . .
¢ Other filers—See instructions forline 9c . soe
10 Income tax liability as adjusted (subtract line 9 from line 8) . woe 10
11a Entersmaller of line 10 or $25,000 (See instructions for line 11) lla
b Ifline 10 is more than $25,000—Enter 85% of the excess Lo ee A1b,
12 Jobs credit limitation—Add lines llaand1lb. . . . . re 12
13 Total allowed jobs credit—Enter the smaller of line 7 or line 12. This is your General Business Credit
for 1985. Enter here and on Form 1040, line 48; Form 1120, Schedule J, line ath F Form 1120-A, Part!,
line 2; or the proper line of other returns . 13

Instructions

(Section references are to the Internal Revenue
Code.)

Fiscal-Year Filers

The jobs credit shown on this form may be
claimed only for individuals who began work for
you before January 1, 1986.

At the time we printed this form it was
uncertain whether Congress would extend this
deadline. We will use news media and other
means available to provide you with information
and instructions on any change.

Paperwork Reduction Act Notice.—We ask for
this information to carry out the Internal
Revenue laws of the United States. We need it to
ensure that taxpayers are complying with these
law's and to allow us to figure and collect the right
amount of tax. You are required to give us this
information.

General Business Credit.—The general business
credit consists of the investment credit, jobs
credit, credit for alcohol used as fuel, and
employee stock ownership plan (ESOP) credit. If
you have more than one of these credits for 1985,
or a carryback or carryforward of any of these
credits, you must summarize them on Form 3800,

General Business Credit. If you have only a 1985.
jobs credit, you do not have to file Form 3800 this
year.

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 take or revoke the jobs credit any
time within 3 years from the due date of your
return. Take the credit either on your original
return or on an amended return.

Form 5884 (1985)


Form 5884 (1985)

Page 2

For more information, see Publication 906,
Jobs and Research Credits.

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 rules
appiy 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 you
paid 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 $500 a month you paid or
accrued for that person during the year in wages
subject to RUIA tax.

(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 Vietnam-era
veterans.

Economically disadvantaged youths.

© Supplemental Security Income (SSI)
recipients.

@ General assistance recipients.

@ Youths in a cooperative education
program, who belong to an economically
disadvantaged family.

© Economically disadvantaged ex-convicts.

‘© Eligible work incentive employees.

© Qualified summer youth employees, age
16 or 17, who first worked for you
between May ] and September 15, 1985.

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 toa 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)); and

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

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

On lines 1 through 5 figure your credit for wages
you paid or accrued. If you have credits only from
sources that shared a jobs credit (S corporations,
partnerships, estates, trusts, or cooperatives),
skip lines 1 through 5.

Whether or not you complete lines 1 through
5, enter on line 6 any credits you received from
sources that share the credit. Complete the rest
of the form to figure the credit to enter on your
income tax return

Controlled groups: The group member
proportionately contributing the most first-year
wages (or second-year wages if no first-year
wages are involved) figures the group credit in
Part | and skips Part Il.

On separate Forms 5884, that member and
every other member of the group skips lines 1
through 4 and enters its share of the group credit
on line 5. Each member then completes lines 6
through 13 on its separate form. Each group
member attaches to its Form 5884 a schedule
showing how the group credit was divided among
ali the members. The members share the credit
in the same proportion that they contributed
qualifying wages.

Line 1(a).—Enter the number of employees for
whom you have first-year wages

Line 1(b).—Enter the first-year wages. They are
limited to $6,000 of each employee's first-year
wages. If you paid first-year wages to any of these
employees 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, 1984,
and you are a calendar year taxpayer, you would
have figured your 1984 jobs credit based on the
first-year wages you paid between September 1
and December 31, 1984. You would figure your
1985 jobs credit on the rest of the first-year
wages you paid between January 1 and August
31, 1985; and on the second-year wages paid
between September 1 and December 31, 1985.

Line 1(c).—Enter the number of employees for
whom you have second-year wages.

Line 1(d).—Enter the second-year wages. They
are limited to $6,000 for each employee. If you
paid second-year wages to any of these
employees last year, subtract those wages from
the $6,000 limit for that employee.

Line 1(f).—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.

Line 4. Taxpayers with qualified summer
youth employees. —include 85% of the first
$3,000 of wages paid to each qualified

employee.

Line 5.—In general, you must subtract your
current year jobs credit on line 5 from the
deduction on your return for salaries and wages
you paid or owe for 1985. This is true even if you
cannot take the full credit this year and must
carry part of it back or forward.

An exception is a credit based on salaries and
wages you capitalize for depreciation. If you have
such a credit, reduce the amount on which you
figure depreciation by the part of the current year
jobs credit on line 5 that applies to the jobs credit
wages you capitalize.

‘Another exception involves the full absorption
method of inventory costing. See the regulations
under section 280€ 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 5 differs from the amount you
subtract from your salary and wage deduction.
See Publication 906 for details
Line 6.—If you have flow-through credits from
more than one entity or type of entity, add them
up and enter the total on line 6.

Line 6d.—If you belong to a cooperative that has
an excess jobs credit, the cooperative should
have given you a statement showing your share of
the excess. Include on line 6 your total excess
jobs credit from all cooperatives to which you
belong.

Line 7.—Estates and trusts: The jobs credit on
line 7 is shared between the estate or trust itself
and the beneficiaries in proportion to the income
allocable to each. On the dotted line to the left of
the amount on line 7, the estate or trust should
enter its own part of the total jobs credit. Please
label it "1041 PORTION" and use this amount in
Fart to figure the jobs credit to take on Form

S corporations and partnerships: Prorate the jobs
credit on line 7 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: If you cannot use
part of the credit because of the tax liability
limitations, you may carry it back 3 years, then
forward 15 years. Use Form 3800.

Part ll

Line 9c. Other filers.—Before you can claim the
jobs credit (which will be your general business
credit for 1985) against your income tax liability,
you must reduce this tax liability by the credits
listed below:

@ Personal credits
Foreign tax credit
Possessions corporation tax credit
Orphan drug credit
Nonconventional source fuel credit
@ Research credit

Line 11. Limitation.—If the tax liability on line
10 is $25,000 or less, your jobs credit is limited
to that tax liability. If the tax liability is more than
$25,000, your credit is limited to $25,000 plus
85% of the excess.

Ifyou and your spouse file separate returns,
each must use $12,500 instead of $25,000. But
if only one had any credit, that one may use the
entire $25,000.

Controlled corporate groups must divide the
$25,000 among all component members. See
section 38(c)(3\(B).

Estates and trusts, see section 38(c)(3)(D).