Question

During 2023, Lincoln Company hires 11 individuals who are certified to be members of a qualifying targeted group. Each employee works in excess of 600 hours and is paid wages of $12,100 during the year. Determine the amount of Lincoln's Work Opportunity Credit.

Answer 1

The amount of Lincoln's Work Opportunity Credit would be $26,400.

Step-by-step explanation:

The amount of Lincoln's Work Opportunity Credit can be calculated by multiplying the number of qualified employees by the maximum allowed credit per employee. In this case, Lincoln Company hired 11 individuals who are certified members of a qualifying targeted group. The maximum credit per employee is $2,400. So, the amount of Lincoln's Work Opportunity Credit would be $2,400 multiplied by 11, which equals $26,400.

The Work Opportunity Credit for Lincoln Company, based on the hiring of 11 individuals from a qualifying targeted group, who all worked over 600 hours and were each paid wages of $12,100, would be calculated as follows:

The credit is 40% of the first $6,000 of qualified first-year wages for individuals who work at least 400 hours.

Since each individual earned more than $6,000 and worked over 600 hours, the maximum credit for each employee would be 40% of $6,000, which equals $2,400.

For 11 employees, the total Work Opportunity Credit becomes 11 multiplied by $2,400, equalling $26,400.

Lincoln Company's Work Opportunity Credit for the year is $26,400.