Black Company paid wages of $180,000 of which $40,000 was qualified for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

Question

Quizplus · Accepted Answer

The work opportunity tax credit is a general business credit that was designed to encourage employers to hire individuals from certain targeted groups who have consistently faced significant barriers to employment. In this case, Black Company was able to claim $40,000 of their $180,000 in wages as a tax credit under this program.

To calculate the company's deduction for wages, we need to subtract the amount of the tax credit from their total wages. So, the deduction for wages would be:

$180,000 - $40,000 = $140,000

Therefore, the correct answer is option B) $164,000, which is the total wages ($180,000) minus the work opportunity tax credit ($40,000) plus the deduction for wages ($140,000):

$180,000 - $40,000 + $140,000 = $164,000.

Black Company Paid Wages of $180,000 of Which $40,000 Was