Cardinal Corporation hires two persons certified to be eligible employees for the work opportunity tax credit under the general rules (e.g. ,food stamp recipients),each of whom is paid $15,000 during the year.As a result of this event,Cardinal Corporation may claim a work opportunity credit of:

Question

Quizplus · Accepted Answer

The Work Opportunity Tax Credit allows employers to claim a credit equal to a percentage of the first-year wages (up to a certain limit) paid to employees who are part of targeted groups, such as food stamp recipients. The credit rate is generally 40% of the eligible employee's first-year wages, up to a maximum credit of $2,400 per employee. In this case, Cardinal Corporation hired two eligible employees and paid each of them $15,000, so the total wages paid is $30,000. The maximum credit per employee is $2,400, so the maximum credit for two employees is $4,800 (i.e., 40% of $30,000). Therefore, the answer is B, $4,800.

Cardinal Corporation Hires Two Persons Certified to Be Eligible Employees