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J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line by Barbara Weltman

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Employment-Related Credits

The tax law encourages you to hire certain workers by permitting you to claim tax credits for certain wages you have paid.

WORK OPPORTUNITY CREDIT

The work opportunity credit (with the exception of the credit for hiring certain veterans) expired at the end of 2011. If the expired portion of the credit is extended, then the following information applies for 2012. A credit applies for hiring workers from certain economically disadvantaged designated groups:

NOTE
Employment credits reduce both your deduction for wages as well as your tax liablility. Employment credits (other than the empowerment zone employment credit) are part of the general business credit.
  • Recipient of Temporary Assistance for Needy Families (TANF) (someone who is a member of a family receiving TANF or its predecessor, AFDC, for any 9 months during the past 18 months ending on the hire date).
  • Qualified veteran (someone with a service-related disability who has been unemployed for any 6 months or more during a 1-year period ending on the hire date).
  • Qualified ex-felon (someone convicted of a felony under any statute of the United States or any state, who received food stamps for at least 3 months during the 12-month period ending on the hiring date, and is hired not more than 1 year after the date of conviction or release from prison).
  • Designated community resident (someone at least age 18, but not yet 40, on the hiring date, who resides in an empowerment zone, enterprise community, ...

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