In March 2011,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 2011.Only one of the individuals continued to work for Gray Corporation in 2012,earning $9,000 during the year.No additional workers were hired in 2012.Gray Corporation's work opportunity tax credit amounts for 2011 and 2012 are:

Question

Quizplus · Accepted Answer

Gray Corporation can claim the work opportunity tax credit for hiring long-term family assistance recipients, which is equal to 40% of the first $6,000 in wages paid to each employee during the first year of employment and 50% of the first $6,000 in wages paid during the second year of employment.

For 2011, Gray Corporation hired two employees and paid each $11,000, which is above the $6,000 wage limit for the work opportunity tax credit calculation. However, Gray Corporation can still claim the tax credit for both employees, but the credit will be limited to 40% of $6,000 for each employee, which totals $4,800. Therefore, Gray Corporation's work opportunity tax credit for 2011 is $4,800 x 2 = $9,600.

In 2012, only one employee continued to work for Gray Corporation and earned $9,000. The work opportunity tax credit for this employee is 50% of $6,000, which equals $3,000. Therefore, Gray Corporation's work opportunity tax credit for 2012 is $3,000.

The total work opportunity tax credit amount for Gray Corporation is $9,600 (2011) + $3,000 (2012) = $12,600. Converted into answer choices, the closest option is B) $8,000 in 2011, $4,500 in 2012.

In March 2011,Gray Corporation Hired Two Individuals,both of Whom Were