Worker Opportunity and Employee Retention Credits (5884 and 5584a)

The Worker Opportunity Credit acts as an incentive for employers to hire individuals in targeted areas of the country. The credit is equal to 40 percent of the first $6,000 of wages paid to qualified individuals. The act expands this credit for any individual hired between August 28, 2005 and August 28, 2007 whose principal residence is located in the core disaster area, or any individual who was displaced from their principal residence located in the core disaster area, and is hired outside of the area. As a result, businesses who hire a qualified individual anywhere in the country may qualify for this credit.

In addition, the new Employee Retention Credit allows the same credit for qualified employers who kept employees on their payroll while the business wasn’t operating due to Katrina. To qualify, employers must have fewer than 200 employees and be located in the core disaster area. Additionally, business activities must have been inoperable on any day due to the hurricane. This credit is available for salaries paid while the business is inoperable from August 28 until December 31, 2005.

From December 2005

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