In March 2013,Gray Corporation hired two individuals,both of whom were certified as long-term recipients of family assistance benefits.Each employee was paid $11,000 during 2013.Only one of the individuals continued to work for Gray Corporation in 2014,earning $9,000 during the year.No additional workers were hired in 2014.Gray Corporation's work opportunity tax credit amounts for 2013 and 2014 are:

Question

Quizplus · Accepted Answer

The work opportunity tax credit (WOTC) is available for employers who hire individuals from certain targeted groups, including long-term family assistance recipients. For each long-term family assistance recipient hired, the WOTC is generally equal to 40% of the first $6,000 of wages paid in the first year of employment and 25% of the first $10,000 of wages paid in the second year of employment.

In this case, Gray Corporation hired two long-term family assistance recipients in 2013 and paid them each $11,000. Therefore, the total wages paid to both employees were $22,000. The WOTC for 2013 is 40% of the first $6,000 of wages paid to each employee, or $4,800 per employee. Since Gray Corporation hired two eligible employees, they are eligible for a total WOTC of $9,600 for 2013.

In 2014, only one of the two employees continued to work for Gray Corporation and was paid $9,000. Therefore, the WOTC for 2014 is 40% of the first $6,000 of wages paid to this employee, or $2,400.

Adding the 2013 and 2014 WOTCs together, Gray Corporation's total WOTC amount is $9,600 + $2,400 = $12,000. However, since answer choice D is not one of the options, the best choice is B, which is the closest option at $8,000 in 2013 and $4,500 in 2014.

In March 2013,Gray Corporation Hired Two Individuals,both of Whom Were