Work Opportunity Tax Credit

AAA

DEFINITION of 'Work Opportunity Tax Credit'

A separate, nonrefundable credit that is part of the general business credit. The work opportunity tax credit is designed to encourage employers to hire workers from certain minority groups with higher-than-average unemployment rates. This credit can be for as much as 40\% of the qualified wages you pay to workers in this category in the first year.

INVESTOPEDIA EXPLAINS 'Work Opportunity Tax Credit'

The work opportunity tax credit is figured on Form 5884, and is aggregated with all of the other business credits. There are several targeted groups of workers that will qualify their employers for this credit, including veterans, ex-felons, high-risk youth, food stamp recipients, SSI recipients and several other groups.

VIDEO

RELATED TERMS
  1. Research Activities Credit

    A nonrefundable federal tax credit implemented in 1981 as an ...
  2. Taxable Income

    The amount of income that is used to calculate an individual's ...
  3. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  4. Heroes Earned Retirement Opportunities ...

    Legislation passed by Congress on May 18, 2006, that allows tax-free ...
  5. Non-Refundable Tax Credit

    A tax credit that can't reduce the amount of tax owed to less ...
  6. Deferred Tax Asset

    An asset on a company's balance sheet that may be used to reduce ...
Related Articles
  1. Tax Credit For Plan Expenses Incurred ...
    Entrepreneurship

    Tax Credit For Plan Expenses Incurred ...

  2. Saver's Tax Credit: A Retirement Savings ...
    Savings

    Saver's Tax Credit: A Retirement Savings ...

  3. Tax Deductions Vs. Tax Credits
    Taxes

    Tax Deductions Vs. Tax Credits

  4. Give Your Taxes Some Credit
    Taxes

    Give Your Taxes Some Credit

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center