Form 5884

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Form 5884

What is Form 5884?

Form 5884 is an IRS form which is also known as “Work Opportunity Credit”. Employers fill form 5884 form to claim the work opportunity tax credit (WOTC) if they are hiring a specific target group of employees listed by the Internal Revenue Service.

The targeted group of employees includes,

  • Long-term family assistance recipient
  • Qualified recipient of long term or short term Temporary Assistance for Needy Families (TANF)
  • Qualified veteran of the Armed forces of US
  • Qualified ex-felon
  • Designated community residents from empowerment zones (EZs)
  • Vocational rehabilitation referral
  • Summer youth employees from empowerment zones (EZs)
  • Supplemental Nutrition Assistance Program SNAP recipient (Food Stamps)
  • Supplemental Security Income recipient
  • Qualified long-term unemployment recipient.

What are the requirements for Work Opportunity Tax Credit (WOTC)?

Employee(s) must work at least 120 hours (27 weeks) in the first year of employment so that employer can be eligible to claim the work opportunity tax credit (WOTC).

How much Work Opportunity Tax Credit (WOTC) can be claimed by an employer?

  • Employer can claim 25% of the qualified first year wages of employees who worked for at least 120 hours (27 weeks) and less than 400 hours (10 weeks).
  • Employer can claim 40% of the qualified first year wages of employees who worked for at least 400 hours.
  • Employer can claim 50% of qualified second year wages of employees who are certified as long term family assistance recipient