Form 5884

Department of the Treasury 

Internal Revenue Service

Work Opportunity Credit

▶ Attach to your tax return.

▶ Information about Form 5884 and its instructions is at www.irs.gov/form5884.

OMB No. 1545-0219

2014

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 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 . $ × 25% (.25) 1a

b Qualified first-year wages of employees who worked 

for you at least 400 hours . . . . . . . . . . × 40% (.40) 1b

c Qualified second-year wages of employees certified as 

long-term family assistance recipients . . . . . . $ × 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 (see instructions) . . . . . . . . . . . . . . . . . . . . . . . 3

4 Add lines 2 and 3. Cooperatives, estates, and trusts, go to line 5. Partnerships and 

S corporations, stop here and report this amount on Schedule K. All others, stop here 

and report this amount on Form 3800, Part III, line 4b . . . . . . . . . . . . 4

5 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust 

(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . 5

6 Cooperatives, estates, and trusts, subtract line 5 from line 4. Report this amount on 

Form 3800, Part III, line 4b . . . . . . . . . . . . . . . . . . . . . . 6

General Instructions

Section references are to the Internal Revenue Code 

unless otherwise noted.

Future Developments

For the latest information about developments related to 

Form 5884 and its instructions, such as legislation 

enacted after they were published, go to 

www.irs.gov/form5884.

What's New

• The work opportunity credit has been extended to cover 

employees who began work in 2014. Do not report wages 

paid or incurred to employees who begin work after 2014 

on Form 5884 unless the credit is extended. 

• Empowerment zone designations have been extended 

to cover 2014. Wages paid or incurred for services 

performed after 2014 by a designated community 

resident or summer youth employee who lives in an 

empowerment zone may no longer qualify for the work 

opportunity credit unless the designation is extended. 

See Qualified Wages for details.

Purpose of Form

Use Form 5884 to claim the work opportunity credit for 

qualified first- and/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 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.

Partnerships, S corporations, cooperatives, estates, 

and trusts must file this form to claim the credit. All other 

taxpayers are not required to complete or file this form if 

their only source for this credit is a partnership, S 

corporation, cooperative, estate, or trust. Instead, they 

can report this credit directly on Form 3800, General 

Business Credit. 

How To Claim the Credit

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 either: 

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13570D Form 5884 (2014) 

$
Form 5884 (2014) Page 2

• Receive the certification by the day the individual begins 

work, or 

• Complete Form 8850, Pre-Screening Notice and 

Certification Request for the Work Opportunity Credit, on 

or before the day you offer the individual a job and 

receive the certification before you claim the credit. 

If you complete Form 8850, it generally must be signed 

by you and the individual and submitted to the SESA of 

the state in which your business is located (where the 

employee works) by the 28th calendar day after the 

individual begins work. However, because the credit 

expired at the end of 2013 and was retroactively 

extended on December 19, 2014, you may be allowed 

more time to submit Form 8850 for an individual who 

began work while the credit was expired or for a 

reasonable time after it was extended. We will update 

www.irs.gov/form5884 as additional information 

becomes available. 

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.

Targeted group employee. An employee is a member of 

a targeted group if he or she began working for you 

before 2015 and is a:

• Long-term family assistance recipient,

• Qualified recipient of Temporary Assistance for Needy 

Families (TANF),

• Qualified veteran,

• Qualified ex-felon,

• Designated community resident,

• Vocational rehabilitation referral,

• Summer youth employee,

• Supplemental Nutrition Assistance Program (SNAP) 

benefits (food stamps) recipient, or 

• SSI recipient. 

See the Instructions for Form 8850 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,

• 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;

• Wages paid to or incurred for a designated community 

resident for services performed while the employee lived 

outside an empowerment zone 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, figure 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 an employee certified as a qualified 

veteran is limited to the following amounts.
Form 5884 (2014) Page 3

• $6,000 for a qualified veteran certified as being either 

(a) a member of a family receiving SNAP assistance (food 

stamps) for at least a 3-month period during the 

15-month period ending on the hiring date, or 

(b) unemployed for a period or periods totaling at least 4 

weeks (whether or not consecutive) but less than 6 

months in the 1-year period ending on the hiring date.

• $12,000 for a qualified veteran certified as being entitled 

to compensation for a service-connected disability and 

hired not more than 1 year after being discharged or 

released from active duty in the U.S. Armed Forces.

• $14,000 for a qualified veteran certified as being 

unemployed for a period or periods totaling at least 6 

months (whether or not consecutive) in the 1-year period 

ending on the hiring date.

• $24,000 for a qualified veteran certified as being entitled 

to compensation for a service-connected disability, and 

unemployed for a period or periods totaling at least 6 

months (whether or not consecutive), in the 1-year period 

ending on the hiring date.

The amount of qualified 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 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 secondyear 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 total work opportunity credits from:

• Schedule K-1 (Form 1065), Partner's Share of Income, 

Deductions, Credits, etc., box 15 (code J); 

• Schedule K-1 (Form 1120S), Shareholder's Share of 

Income, Deductions, Credits, etc., box 13 (code J);

• Schedule K-1 (Form 1041), Beneficiary's Share of 

Income, Deductions, Credits, etc., box 13 (code F); or 

• Form 1099-PATR, Taxable Distributions Received From 

Cooperatives, box 8, or other notice of credit allocation.

Partnerships, S corporations, cooperatives, estates, and 

trusts must always report the above credits on line 3. All 

other filers figuring a separate credit on earlier lines must 

also report the above credits on line 3. All others not 

using earlier lines to figure a separate credit can report 

the above credits directly on Form 3800, Part III, line 4b. 

Line 5

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.

If the cooperative is subject to the passive activity rules, 

include on line 3 any Form 5884 credit from passive 

activities disallowed for prior years and carried forward to 

this year. Complete Form 8810, Corporate Passive 

Activity Loss and Credit Limitations, to determine the 

allowed credit that must be allocated to patrons. For 

details, see the Instructions for Form 8810. 

Estates and trusts. Allocate the work opportunity credit 

on line 4 between the estate or trust and the beneficiaries 

in the same proportion as income was allocated and enter 

the beneficiaries' share on line 5.

If the estate or trust is subject to the passive activity 

rules, include on line 3 any Form 5884 credit from passive 

activities disallowed for prior years and carried forward to 

this year. Complete Form 8582-CR, Passive Activity 

Credit Limitations, to determine the allowed credit that 

must be allocated between the estate or trust and the 

beneficiaries. For details, see the Instructions for Form 

8582-CR.

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.
Form 5884 (2014) Page 4

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 . . . . . . . . . . 3 hr., 6 min.

Learning about the law 

or the form . . . . . . . . . . . 1 hr., 15 min.

Preparing and sending 

the form to the IRS . . . . . . . . 2 hr., 34 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.