Child Care Credit/Other Credits

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Frequently Asked Tax Questions

Child Care Credit/Other Credits - Other Credits

Rev. date: 1/1/2011

I heard there is a credit for hiring certain groups of workers, such as veterans or ex-felons. Is that the same thing as the Work Opportunity Tax Credit?

Credit Work Opportunity
Pre-Screening Notice and Certification Request for the Work Opportunity Credit
Veterans
Work Opportunity Credit

The Work Opportunity Credit provides an incentive to hire individuals from targeted groups that have a particularly high unemployment rate or other special employment needs. In most cases, the credit can be as much as 40% of the "qualified first year wages."

If the individual is a disabled veteran, the credit can be twice as much.
If the individual is a long-term family assistance recipient, the credit is available over a 2-year period and is calculated on a greater amount of wages.
The credit is claimed by filing Form 5884 (PDF), Work Opportunity Credit, with the business's tax return.

An individual is a member of a targeted group if he or she is a:

Qualified recipient of assistance under under title IV of the Social Security Act
Qualified veteran
Qualified ex-felon
Designated community resident
Vocational rehabilitation referral
Qualified summer youth employee
Qualified recipient of supplemental nutrition assistance program benefits
Qualified SSI recipient
Long-term family assistance recipient
Unemployed veteran
Disconnected youth

An individual is not considered a member of a targeted group unless your state employment security agency certifies him or her as a member. This certification requirement can be satisfied in either of two ways:

On or before the day on which the individual begins work for you, you have received a certification from your state employment security agency that the individual is a member of a targeted group, or
On or before the day you offer employment to an individual, the individual completes page 1 of Form 8850 (PDF), Pre-Screening Notice and Certification Request for the Work Opportunity Credits.
You complete page 2 of the form, and you send the form to your state workforce agency no later than the 28th day after the individual begins work.
You must receive the certification before claiming the credit.

Additional Information

Tax Info for Business

Rev. date: 3/9/2010

What is the Health Coverage Tax Credit and how can I learn more about it?

Health Coverage Tax Credit

The Health Coverage Tax Credit (HCTC) is a refundable tax credit that pays 80% of qualified health plan premiums for certain trade-affected workers, retiress, and their families from May 1, 2009 through December 31, 2010. The HCTC is a unique tax credit that individuals can receive either monthly as their health plan premium becomes due or yearly on their federal tax rerturn. You can learn more about this valuable tax credit on the Health Coverage Tax Credit (HCTC) Program pages on this website.

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