In March 2012, 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 2012.Only one of the individuals continued to work for Gray Corporation in 2013, earning $9,000 during the year.No additional workers were hired in 2013.Gray Corporation's work opportunity tax credit amounts for 2012 and 2013 are:

Question

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According to IRS guidelines, an employer is eligible for a tax credit equal to 40 percent of the first $6,000 of wages paid to a new hire certified as a long-term recipient of family assistance benefits. In 2012, Gray Corporation hired two such individuals and paid each of them $11,000. However, the tax credit is capped at $8,000 per employee. Therefore, Gray Corporation is eligible for a tax credit of $8,000 in 2012.

In 2013, only one of the individuals continued to work for Gray Corporation and earned $9,000 during the year. As this individual was already employed in 2012, Gray Corporation is eligible for a tax credit equal to 40 percent of the first $6,000 of wages paid to this employee in 2013, i.e. $2,400. Therefore, Gray Corporation is eligible for a total tax credit of $8,000 in 2012 and $2,400 in 2013, making choice B the correct answer.

In March 2012, Gray Corporation Hired Two Individuals, Both of Whom