26 U.S.C. § 51 — Amount of credit

Page 387 TITLE 26—INTERNAL REVENUE CODE § 51 1 See References in Text note below. SUBPART F—RULES FOR COMPUTING WORK OPPORTUNITY CREDIT Sec. 51. Amount of credit. [51A. Repealed.] 52. Special rules. Editorial Notes AMENDMENTS 2006—Pub. L. 109–432, div. A, title I, § 105(e)(4)(B), Dec. 20, 2006, 120 Stat. 2937, struck out item 51A ‘‘Temporary incentives for employing long-term family assistance recipients’’. 1997—Pub. L. 105–34, title VIII, § 801(b), Aug. 5, 1997, 111 Stat. 871, added item 51A. 1996—Pub. L. 104–188, title I, § 1201(e)(2), Aug. 20, 1996, 110 Stat. 1772, substituted ‘‘Work Opportunity Credit’’ for ‘‘Targeted Jobs Credit’’ in subpart heading. 1984—Pub. L. 98–369, div. A, title IV, § 474(n)(1), (2), (p)(9), July 18, 1984, 98 Stat. 833, 838, substituted ‘‘F’’ for ‘‘D’’ as subpart designation, substituted ‘‘Rules for Computing Targeted Jobs Credit’’ for ‘‘Rules for Com- puting Credit for Employment of Certain New Employ- ees’’ in heading, and struck out item 53 ‘‘Limitation based on amount of tax’’. § 51. Amount of credit (a) Determination of amount For purposes of section 38, the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year. (b) Qualified wages defined For purposes of this subpart— (1) In general The term ‘‘qualified wages’’ means the wages paid or incurred by the employer during the taxable year to individuals who are mem- bers of a targeted group. (2) Qualified first-year wages The term ‘‘qualified first-year wages’’ means, with respect to any individual, quali- fied wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the em- ployer. (3) Limitation on wages per year taken into ac- count The amount of the qualified first-year wages which may be taken into account with respect to any individual shall not exceed $6,000 per year ($12,000 per year in the case of any indi- vidual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any indi- vidual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II)). (c) Wages defined For purposes of this subpart— (1) In general Except as otherwise provided in this sub- section and subsection (h)(2), the term ‘‘wages’’ has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation con- tained in such section). (2) On-the-job training and work supplemen- tation payments (A) Exclusion for employers receiving on-the- job training payments The term ‘‘wages’’ shall not include any amounts paid or incurred by an employer for any period to any individual for whom the employer receives federally funded pay- ments for on-the-job training of such indi- vidual for such period. (B) Reduction for work supplementation pay- ments to employers The amount of wages which would (but for this subparagraph) be qualified wages under this section for an employer with respect to an individual for a taxable year shall be re- duced by an amount equal to the amount of the payments made to such employer (how- ever utilized by such employer) with respect to such individual for such taxable year under a program established under section 482(e) 1 of the Social Security Act. (3) Payments for services during labor disputes If— (A) the principal place of employment of an individual with the employer is at a plant or facility, and (B) there is a strike or lockout involving employees at such plant or facility, the term ‘‘wages’’ shall not include any amount paid or incurred by the employer to such individual for services which are the same as, or substantially similar to, those services performed by employees participating in, or affected by, the strike or lockout during the period of such strike or lockout. (4) Termination The term ‘‘wages’’ shall not include any amount paid or incurred to an individual who begins work for the employer after December 31, 2025. (5) Coordination with payroll tax forgiveness The term ‘‘wages’’ shall not include any amount paid or incurred to a qualified indi- vidual (as defined in section 3111(d)(3)) 1 during the 1-year period beginning on the hiring date of such individual by a qualified employer (as defined in section 3111(d)) 1 unless such quali- fied employer makes an election not to have section 3111(d) 1 apply. (d) Members of targeted groups For purposes of this subpart— (1) In general An individual is a member of a targeted group if such individual is— (A) a qualified IV–A recipient, (B) a qualified veteran, (C) a qualified ex-felon, (D) a designated community resident, (E) a vocational rehabilitation referral, (F) a qualified summer youth employee, Page 388 TITLE 26—INTERNAL REVENUE CODE § 51 (G) a qualified supplemental nutrition as- sistance program benefits recipient, (H) a qualified SSI recipient, (I) a long-term family assistance recipient, or (J) a qualified long-term unemployment recipient. (2) Qualified IV–A recipient (A) In general The term ‘‘qualified IV–A recipient’’ means any individual who is certified by the designated local agency as being a member of a family receiving assistance under a IV–A program for any 9 months during the 18-month period ending on the hiring date. (B) IV–A program For purposes of this paragraph, the term ‘‘IV–A program’’ means any program pro- viding assistance under a State program funded under part A of title IV of the Social Security Act and any successor of such pro- gram. (3) Qualified veteran (A) In general The term ‘‘qualified veteran’’ means any veteran who is certified by the designated local agency as— (i) being a member of a family receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for at least a 3-month period ending during the 12-month period ending on the hiring date, (ii) entitled to compensation for a serv- ice-connected disability, and— (I) having a hiring date which is not more that 1 year after having been dis- charged or released from active duty in the Armed Forces of the United States, or (II) having aggregate periods of unem- ployment during the 1-year period end- ing on the hiring date which equal or ex- ceed 6 months, (iii) having aggregate periods of unem- ployment during the 1-year period ending on the hiring date which equal or exceed 4 weeks (but less than 6 months), or (iv) having aggregate periods of unem- ployment during the 1-year period ending on the hiring date which equal or exceed 6 months. (B) Veteran For purposes of subparagraph (A), the term ‘‘veteran’’ means any individual who is cer- tified by the designated local agency as— (i)(I) having served on active duty (other than active duty for training) in the Armed Forces of the United States for a period of more than 180 days, or (II) having been discharged or released from active duty in the Armed Forces of the United States for a service-connected disability, and (ii) not having any day during the 60-day period ending on the hiring date which was a day of extended active duty in the Armed Forces of the United States. For purposes of clause (ii), the term ‘‘ex- tended active duty’’ means a period of more than 90 days during which the individual was on active duty (other than active duty for training). (C) Other definitions For purposes of subparagraph (A), the terms ‘‘compensation’’ and ‘‘service-con- nected’’ have the meanings given such terms under section 101 of title 38, United States Code. (4) Qualified ex-felon The term ‘‘qualified ex-felon’’ means any in- dividual who is certified by the designated local agency— (A) as having been convicted of a felony under any statute of the United States or any State, and (B) as having a hiring date which is not more than 1 year after the last date on which such individual was so convicted or was released from prison. (5) Designated community residents (A) In general The term ‘‘designated community resi- dent’’ means any individual who is certified by the designated local agency— (i) as having attained age 18 but not age 40 on the hiring date, and (ii) as having his principal place of abode within an empowerment zone, enterprise community, renewal community, or rural renewal county. (B) Individual must continue to reside in zone, community, or county In the case of a designated community resident, the term ‘‘qualified wages’’ shall not include wages paid or incurred for serv- ices performed while the individual’s prin- cipal place of abode is outside an empower- ment zone, enterprise community, renewal community, or rural renewal county. (C) Rural renewal county For purposes of this paragraph, the term ‘‘rural renewal county’’ means any county which— (i) is outside a metropolitan statistical area (defined as such by the Office of Man- agement and Budget), and (ii) during the 5-year periods 1990 through 1994 and 1995 through 1999 had a net population loss. (6) Vocational rehabilitation referral The term ‘‘vocational rehabilitation refer- ral’’ means any individual who is certified by the designated local agency as— (A) having a physical or mental disability which, for such individual, constitutes or re- sults in a substantial handicap to employ- ment, and (B) having been referred to the employer upon completion of (or while receiving) reha- bilitative services pursuant to— (i) an individualized written plan for em- ployment under a State plan for voca- tional rehabilitation services approved under the Rehabilitation Act of 1973, Page 389 TITLE 26—INTERNAL REVENUE CODE § 51 (ii) a program of vocational rehabilita- tion carried out under chapter 31 of title 38, United States Code, or (iii) an individual work plan developed and implemented by an employment net- work pursuant to subsection (g) of section 1148 of the Social Security Act with re- spect to which the requirements of such subsection are met. (7) Qualified summer youth employee (A) In general The term ‘‘qualified summer youth em- ployee’’ means any individual— (i) who performs services for the em- ployer between May 1 and September 15, (ii) who is certified by the designated local agency as having attained age 16 but not 18 on the hiring date (or if later, on May 1 of the calendar year involved), (iii) who has not been an employee of the employer during any period prior to the 90- day period described in subparagraph (B)(i), and (iv) who is certified by the designated local agency as having his principal place of abode within an empowerment zone, en- terprise community, or renewal commu- nity. (B) Special rules for determining amount of credit For purposes of applying this subpart to wages paid or incurred to any qualified sum- mer youth employee— (i) subsection (b)(2) shall be applied by substituting ‘‘any 90-day period between May 1 and September 15’’ for ‘‘the 1-year period beginning with the day the indi- vidual begins work for the employer’’, and (ii) subsection (b)(3) shall be applied by substituting ‘‘$3,000’’ for ‘‘$6,000’’. The preceding sentence shall not apply to an individual who, with respect to the same em- ployer, is certified as a member of another targeted group after such individual has been a qualified summer youth employee. (C) Youth must continue to reside in zone or community Paragraph (5)(B) shall apply for purposes of subparagraph (A)(iv). (8) Qualified supplemental nutrition assistance program benefits recipient (A) In general The term ‘‘qualified supplemental nutri- tion assistance program benefits recipient’’ means any individual who is certified by the designated local agency— (i) as having attained age 18 but not age 40 on the hiring date, and (ii) as being a member of a family— (I) receiving assistance under a supple- mental nutrition assistance program under the Food and Nutrition Act of 2008 for the 6-month period ending on the hir- ing date, or (II) receiving such assistance for at least 3 months of the 5-month period ending on the hiring date, in the case of a member of a family who ceases to be eligible for such assistance under section 6(o) of the Food and Nutrition Act of 2008. (B) Participation information Notwithstanding any other provision of law, the Secretary of the Treasury and the Secretary of Agriculture shall enter into an agreement to provide information to des- ignated local agencies with respect to par- ticipation in the supplemental nutrition as- sistance program. (9) Qualified SSI recipient The term ‘‘qualified SSI recipient’’ means any individual who is certified by the des- ignated local agency as receiving supple- mental security income benefits under title XVI of the Social Security Act (including sup- plemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93–66) for any month ending within the 60-day period ending on the hiring date. (10) Long-term family assistance recipient The term ‘‘long-term family assistance re- cipient’’ means any individual who is certified by the designated local agency— (A) as being a member of a family receiv- ing assistance under a IV–A program (as de- fined in paragraph (2)(B)) for at least the 18- month period ending on the hiring date, (B)(i) as being a member of a family re- ceiving such assistance for 18 months begin- ning after August 5, 1997, and (ii) as having a hiring date which is not more than 2 years after the end of the ear- liest such 18-month period, or (C)(i) as being a member of a family which ceased to be eligible for such assistance by reason of any limitation imposed by Federal or State law on the maximum period such assistance is payable to a family, and (ii) as having a hiring date which is not more than 2 years after the date of such ces- sation. (11) Hiring date The term ‘‘hiring date’’ means the day the individual is hired by the employer. (12) Designated local agency The term ‘‘designated local agency’’ means a State employment security agency established in accordance with the Act of June 6, 1933, as amended (29 U.S.C. 49–49n). (13) Special rules for certifications (A) In general An individual shall not be treated as a member of a targeted group unless— (i) on or before the day on which such in- dividual begins work for the employer, the employer has received a certification from a designated local agency that such indi- vidual is a member of a targeted group, or (ii)(I) on or before the day the individual is offered employment with the employer, a pre-screening notice is completed by the employer with respect to such individual, and Page 390 TITLE 26—INTERNAL REVENUE CODE § 51 (II) not later than the 28th day after the individual begins work for the employer, the employer submits such notice, signed by the employer and the individual under penalties of perjury, to the designated local agency as part of a written request for such a certification from such agency. For purposes of this paragraph, the term ‘‘pre-screening notice’’ means a document (in such form as the Secretary shall pre- scribe) which contains information provided by the individual on the basis of which the employer believes that the individual is a member of a targeted group. (B) Incorrect certifications If— (i) an individual has been certified by a designated local agency as a member of a targeted group, and (ii) such certification is incorrect be- cause it was based on false information provided by such individual, the certification shall be revoked and wages paid by the employer after the date on which notice of revocation is received by the em- ployer shall not be treated as qualified wages. (C) Explanation of denial of request If a designated local agency denies a re- quest for certification of membership in a targeted group, such agency shall provide to the person making such request a written explanation of the reasons for such denial. (D) Credit for unemployed veterans (i) In general Notwithstanding subparagraph (A), for purposes of paragraph (3)(A)— (I) a veteran will be treated as certified by the designated local agency as having aggregate periods of unemployment meeting the requirements of clause (ii)(II) or (iv) of such paragraph (which- ever is applicable) if such veteran is cer- tified by such agency as being in receipt of unemployment compensation under State or Federal law for not less than 6 months during the 1-year period ending on the hiring date, and (II) a veteran will be treated as cer- tified by the designated local agency as having aggregate periods of unemploy- ment meeting the requirements of clause (iii) of such paragraph if such veteran is certified by such agency as being in re- ceipt of unemployment compensation under State or Federal law for not less than 4 weeks (but less than 6 months) during the 1-year period ending on the hiring date. (ii) Regulatory authority The Secretary may provide alternative methods for certification of a veteran as a qualified veteran described in clause (ii)(II), (iii), or (iv) of paragraph (3)(A), at the Secretary’s discretion. (14) Credit allowed for unemployed veterans and disconnected youth hired in 2009 or 2010 (A) In general Any unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010 shall be treated as a mem- ber of a targeted group for purposes of this subpart. (B) Definitions For purposes of this paragraph— (i) Unemployed veteran The term ‘‘unemployed veteran’’ means any veteran (as defined in paragraph (3)(B), determined without regard to clause (ii) thereof) who is certified by the des- ignated local agency as— (I) having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date, and (II) being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks during the 1-year period ending on the hiring date. (ii) Disconnected youth The term ‘‘disconnected youth’’ means any individual who is certified by the des- ignated local agency— (I) as having attained age 16 but not age 25 on the hiring date, (II) as not regularly attending any sec- ondary, technical, or post-secondary school during the 6-month period pre- ceding the hiring date, (III) as not regularly employed during such 6-month period, and (IV) as not readily employable by rea- son of lacking a sufficient number of basic skills. (15) Qualified long-term unemployment recipi- ent The term ‘‘qualified long-term unemploy- ment recipient’’ means any individual who is certified by the designated local agency as being in a period of unemployment which— (A) is not less than 27 consecutive weeks, and (B) includes a period in which the indi- vidual was receiving unemployment com- pensation under State or Federal law. (e) Credit for second-year wages for employment of long-term family assistance recipients (1) In general With respect to the employment of a long- term family assistance recipient— (A) the amount of the work opportunity credit determined under this section for the taxable year shall include 50 percent of the qualified second-year wages for such year, and (B) in lieu of applying subsection (b)(3), the amount of the qualified first-year wages, and the amount of qualified second-year wages, which may be taken into account with respect to such a recipient shall not ex- ceed $10,000 per year. Page 391 TITLE 26—INTERNAL REVENUE CODE § 51 (2) Qualified second-year wages For purposes of this subsection, the term ‘‘qualified second-year wages’’ means qualified wages— (A) which are paid to a long-term family assistance recipient, and (B) which are attributable to service ren- dered during the 1-year period beginning on the day after the last day of the 1-year pe- riod with respect to such recipient deter- mined under subsection (b)(2). (3) Special rules for agricultural and railway labor If such recipient is an employee to whom subparagraph (A) or (B) of subsection (h)(1) ap- plies, rules similar to the rules of such sub- paragraphs shall apply except that— (A) such subparagraph (A) shall be applied by substituting ‘‘$10,000’’ for ‘‘$6,000’’, and (B) such subparagraph (B) shall be applied by substituting ‘‘$833.33’’ for ‘‘$500’’. (f) Remuneration must be for trade or business employment (1) In general For purposes of this subpart, remuneration paid by an employer to an employee during any taxable year shall be taken into account only if more than one-half of the remunera- tion so paid is for services performed in a trade or business of the employer. (2) Special rule for certain determination Any determination as to whether paragraph (1), or subparagraph (A) or (B) of subsection (h)(1), applies with respect to any employee for any taxable year shall be made without regard to subsections (a) and (b) of section 52. (g) United States Employment Service to notify employers of availability of credit The United States Employment Service, in consultation with the Internal Revenue Service, shall take such steps as may be necessary or ap- propriate to keep employers apprised of the availability of the work opportunity credit de- termined under this subpart. (h) Special rules for agricultural labor and rail- way labor For purposes of this subpart— (1) Unemployment insurance wages (A) Agricultural labor If the services performed by any employee for an employer during more than one-half of any pay period (within the meaning of section 3306(d)) taken into account with re- spect to any year constitute agricultural labor (within the meaning of section 3306(k)), the term ‘‘unemployment insurance wages’’ means, with respect to the remu- neration paid by the employer to such em- ployee for such year, an amount equal to so much of such remuneration as constitutes ‘‘wages’’ within the meaning of section 3121(a), except that the contribution and benefit base for each calendar year shall be deemed to be $6,000. (B) Railway labor If more than one-half of remuneration paid by an employer to an employee during any year is remuneration for service described in section 3306(c)(9), the term ‘‘unemployment insurance wages’’ means, with respect to such employee for such year, an amount equal to so much of the remuneration paid to such employee during such year which would be subject to contributions under sec- tion 8(a) of the Railroad Unemployment In- surance Act (45 U.S.C. 358(a)) if the max- imum amount subject to such contributions were $500 per month. (2) Wages In any case to which subparagraph (A) or (B) of paragraph (1) applies, the term ‘‘wages’’ means unemployment insurance wages (deter- mined without regard to any dollar limita- tion). (i) Certain individuals ineligible (1) Related individuals No wages shall be taken into account under subsection (a) with respect to an individual who— (A) bears any of the relationships de- scribed in subparagraphs (A) through (G) of section 152(d)(2) to the taxpayer, or, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation, or, if the taxpayer is an entity other than a corporation, to any indi- vidual who owns, directly or indirectly, more than 50 percent of the capital and prof- its interests in the entity (determined with the application of section 267(c)), (B) if the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the es- tate or trust, or is an individual who bears any of the relationships described in sub- paragraphs (A) through (G) of section 152(d)(2) to a grantor, beneficiary, or fidu- ciary of the estate or trust, or (C) is a dependent (described in section 152(d)(2)(H)) of the taxpayer, or, if the tax- payer is a corporation, of an individual de- scribed in subparagraph (A), or, if the tax- payer is an estate or trust, of a grantor, ben- eficiary, or fiduciary of the estate or trust. (2) Nonqualifying rehires No wages shall be taken into account under subsection (a) with respect to any individual if, prior to the hiring date of such individual, such individual had been employed by the em- ployer at any time. (3) Individuals not meeting minimum employ- ment periods (A) Reduction of credit for individuals per- forming fewer than 400 hours of service In the case of an individual who has per- formed at least 120 hours, but less than 400 hours, of service for the employer, sub- section (a) shall be applied by substituting ‘‘25 percent’’ for ‘‘40 percent’’. (B) Denial of credit for individuals per- forming fewer than 120 hours of service No wages shall be taken into account under subsection (a) with respect to any in- dividual unless such individual has per- Page 392 TITLE 26—INTERNAL REVENUE CODE § 51 formed at least 120 hours of service for the employer. (j) Election to have work opportunity credit not apply (1) In general A taxpayer may elect to have this section not apply for any taxable year. (2) Time for making election An election under paragraph (1) for any tax- able year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (de- termined without regard to extensions). (3) Manner of making election An election under paragraph (1) (or revoca- tion thereof) shall be made in such manner as the Secretary may by regulations prescribe. (k) Treatment of successor employers; treatment of employees performing services for other persons (1) Treatment of successor employers Under regulations prescribed by the Sec- retary, in the case of a successor employer re- ferred to in section 3306(b)(1), the determina- tion of the amount of the credit under this section with respect to wages paid by such successor employer shall be made in the same manner as if such wages were paid by the pred- ecessor employer referred to in such section. (2) Treatment of employees performing serv- ices for other persons No credit shall be determined under this sec- tion with respect to remuneration paid by an employer to an employee for services per- formed by such employee for another person unless the amount reasonably expected to be received by the employer for such services from such other person exceeds the remunera- tion paid by the employer to such employee for such services. (Added Pub. L. 95–30, title II, § 202(b), May 23, 1977, 91 Stat. 141; amended Pub. L. 95–600, title III, § 321(a), Nov. 6, 1978, 92 Stat. 2830; Pub. L. 96–222, title I, § 103(a)(6)(A), (E), (F), (G)(iii)–(ix), Apr. 1, 1980, 94 Stat. 209, 210; Pub. L. 97–34, title II, § 261(a)–(b)(2)(A), (B)(ii)–(f)(1), Aug. 13, 1981, 95 Stat. 260–262; Pub. L. 97–248, title II, § 233(a)–(d), (f), Sept. 3, 1982, 96 Stat. 501, 502; Pub. L. 97–448, title I, § 102(l)(1), (3), (4), Jan. 12, 1983, 96 Stat. 2374; Pub. L. 98–369, div. A, title IV, § 474(p)(1)–(3), title VII, § 712(n), title X, § 1041(a), (c)(1)–(4), div. B, title VI, §§ 2638(b), 2663(j)(5)(A), July 18, 1984, 98 Stat. 837, 955, 1042, 1043, 1144, 1171; Pub. L. 99–514, title XVII, § 1701(a)–(c), title XVIII, § 1878(f)(1), Oct. 22, 1986, 100 Stat. 2772, 2904; Pub. L. 100–203, title X, § 10601(a), Dec. 22, 1987, 101 Stat. 1330–451; Pub. L. 100–485, title II, § 202(c)(6), Oct. 13, 1988, 102 Stat. 2378; Pub. L. 100–647, title I, § 1017(a), title IV, § 4010(a), (c)(1), (d)(1), Nov. 10, 1988, 102 Stat. 3575, 3655; Pub. L. 101–239, title VII, § 7103(a), (c)(1), Dec. 19, 1989, 103 Stat. 2305; Pub. L. 101–508, title XI, § 11405(a), Nov. 5, 1990, 104 Stat. 1388–473; Pub. L. 102–227, title I, § 105(a), Dec. 11, 1991, 105 Stat. 1687; Pub. L. 103–66, title XIII, §§ 13102(a), 13302(d), Aug. 10, 1993, 107 Stat. 420, 556; Pub. L. 104–188, title I, § 1201(a)–(e)(1), (5), (f), Aug. 20, 1996, 110 Stat. 1768–1772; Pub. L. 104–193, title I, § 110(l)(1), Aug. 22, 1996, 110 Stat. 2173; Pub. L. 105–33, title V, § 5514(a)(1), Aug. 5, 1997, 111 Stat. 620; Pub. L. 105–34, title VI, § 603(a)–(d), Aug. 5, 1997, 111 Stat. 862; Pub. L. 105–277, div. J, title I, § 1002(a), title IV, § 4006(c)(1), Oct. 21, 1998, 112 Stat. 2681–888, 2681–912; Pub. L. 106–170, title V, § 505(a), (b), Dec. 17, 1999, 113 Stat. 1921; Pub. L. 106–554, § 1(a)(7) [title I, § 102(a)–(c), title III, § 316(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A–600, 2763A–644; Pub. L. 107–147, title VI, § 604(a), Mar. 9, 2002, 116 Stat. 59; Pub. L. 108–311, title II, § 207(5), title III, § 303(a)(1), Oct. 4, 2004, 118 Stat. 1177, 1179; Pub. L. 109–432, div. A, title I, § 105(a)–(e)(3), Dec. 20, 2006, 120 Stat. 2936, 2937; Pub. L. 110–28, title VIII, § 8211(a)–(d), May 25, 2007, 121 Stat. 191; Pub. L. 110–234, title IV, § 4002(b)(1)(A), (B), (D), (2)(O), May 22, 2008, 122 Stat. 1095–1097; Pub. L. 110–246, § 4(a), title IV, § 4002(b)(1)(A), (B), (D), (2)(O), June 18, 2008, 122 Stat. 1664, 1857, 1858; Pub. L. 111–5, div. B, title I, § 1221(a), Feb. 17, 2009, 123 Stat. 337; Pub. L. 111–147, title I, § 101(b), Mar. 18, 2010, 124 Stat. 74; Pub. L. 111–312, title VII, § 757(a), Dec. 17, 2010, 124 Stat. 3322; Pub. L. 112–56, title II, § 261(a)–(d), Nov. 21, 2011, 125 Stat. 729, 730; Pub. L. 112–240, title III, § 309(a), Jan. 2, 2013, 126 Stat. 2329; Pub. L. 113–295, div. A, title I, § 119(a), Dec. 19, 2014, 128 Stat. 4015; Pub. L. 114–113, div. Q, title I, § 142(a), (b), Dec. 18, 2015, 129 Stat. 3056; Pub. L. 115–141, div. U, title IV, § 401(a)(26)–(29), Mar. 23, 2018, 132 Stat. 1185; Pub. L. 116–94, div. Q, title I, § 143(a), Dec. 20, 2019, 133 Stat. 3234; Pub. L. 116–260, div. EE, title I, § 113(a), Dec. 27, 2020, 134 Stat. 3050.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsecs. (c)(2)(B) and (d)(2)(B), (6)(B)(iii), (9), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Part A of title IV of the Act is clas- sified generally to part A (§ 601 et seq.) of subchapter IV of chapter 7 of Title 42, The Public Health and Welfare. Title XVI of the Act is classified generally to sub- chapter XVI (§ 1381 et seq.) of chapter 7 of Title 42. Sec- tion 482 of the Act, which was classified to section 682 of Title 42, was repealed by Pub. L. 104–193, title I, § 108(e), Aug. 22, 1996, 110 Stat. 2167. Sections 1148(g) and 1616 of the Act are classified to sections 1320b–19(g) and 1382e, respectively, of Title 42. For complete classifica- tion of this Act to the Code, see section 1305 of Title 42 and Tables. Section 3111(d), referred to in subsec. (c)(5), was re- pealed by Pub. L. 115–141, div. U, title IV, § 401(b)(34), Mar. 23, 2018, 132 Stat. 1204. The Food and Nutrition Act of 2008, referred to in subsec. (d)(3)(A)(i), (8)(A)(ii), is Pub. L. 88–525, Aug. 31, 1964, 78 Stat. 703, which is classified generally to chap- ter 51 (§ 2011 et seq.) of Title 7, Agriculture. Section 6(o) of the Act is classified to section 2015(o) of Title 7. For complete classification of this Act to the Code, see Short Title note set out under section 2011 of Title 7 and Tables. The Rehabilitation Act of 1973, referred to in subsec. (d)(6)(B)(i), is Pub. L. 93–112, Sept. 26, 1973, 87 Stat. 355, which is classified generally to chapter 16 (§ 701 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 701 of Title 29 and Tables. Section 212 of Public Law 93–66, referred to in subsec. (d)(9), is set out as a note under section 1382 of Title 42, The Public Health and Welfare. Act of June 6, 1933, referred to in subsec. (d)(12), is act June 6, 1933, ch. 49, 48 Stat. 113, popularly known as the Page 393 TITLE 26—INTERNAL REVENUE CODE § 51 Wagner-Peyser Act, which is classified generally to chapter 4B (§ 49 et seq.) of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 49 of Title 29 and Tables. CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. PRIOR PROVISIONS A prior section 51, added Pub. L. 90–364, title I, § 102(a), June 28, 1968, 82 Stat. 252; amended Pub. L. 91–53, § 5(a), Aug. 7, 1969, 83 Stat. 93; Pub. L. 91–172, title III, § 301(b)(5), title VII, § 701(a), Dec. 30, 1969, 83 Stat. 585, 657, related to the imposition of a tax surcharge, prior to repeal by Pub. L. 94–455, title XIX, § 1901(a)(7), Oct. 4, 1976, 90 Stat. 1765. AMENDMENTS 2020—Subsec. (c)(4). Pub. L. 116–260 substituted ‘‘De- cember 31, 2025’’ for ‘‘December 31, 2020’’. 2019—Subsec. (c)(4). Pub. L. 116–94 substituted ‘‘De- cember 31, 2020’’ for ‘‘December 31, 2019’’. 2018—Subsec. (c)(4). Pub. L. 115–141, § 401(a)(26), in- serted period at end. Subsec. (d)(3)(A)(ii)(II). Pub. L. 115–141, § 401(a)(27), in- serted comma at end. Subsec. (d)(8). Pub. L. 115–141, § 401(a)(28), substituted ‘‘supplemental nutrition assistance program benefits recipient’’ for ‘‘food stamp recipient’’ in heading. Subsec. (i)(1)(A). Pub. L. 115–141, § 401(a)(29), sub- stituted ‘‘entity’’ for ‘‘entity,’’. 2015—Subsec. (c)(4). Pub. L. 114–113, § 142(a), sub- stituted ‘‘December 31, 2019’’ for ‘‘December 31, 2014’’. Subsec. (d)(1)(J). Pub. L. 114–113, § 142(b)(1), added sub- par. (J). Subsec. (d)(15). Pub. L. 114–113, § 142(b)(2), added par. (15). 2014—Subsec. (c)(4). Pub. L. 113–295 substituted ‘‘for the employer after December 31, 2014’’ for ‘‘for the em- ployer— ‘‘(A) after December 31, 1994, and before October 1, 1996, or ‘‘(B) after December 31, 2013’’. 2013—Subsec. (c)(4)(B). Pub. L. 112–240 substituted ‘‘after December 31, 2013’’ for ‘‘after— ‘‘(i) December 31, 2012, in the case of a qualified vet- eran, and ‘‘(ii) December 31, 2011, in the case of any other in- dividual.’’ 2011—Subsec. (b)(3). Pub. L. 112–56, § 261(a), sub- stituted ‘‘($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any indi- vidual who is a qualified veteran by reason of sub- section (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II))’’ for ‘‘($12,000 per year in the case of any individual who is a qualified veteran by rea- son of subsection (d)(3)(A)(ii))’’. Subsec. (c)(4)(B). Pub. L. 112–56, § 261(d), amended sub- par. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘‘after December 31, 2011.’’ Subsec. (d)(3)(A)(iii), (iv). Pub. L. 112–56, § 261(b), added cls. (iii) and (iv). Subsec. (d)(13)(D). Pub. L. 112–56, § 261(c), added sub- par. (D). 2010—Subsec. (c)(4)(B). Pub. L. 111–312 substituted ‘‘December 31, 2011’’ for ‘‘August 31, 2011’’. Subsec. (c)(5). Pub. L. 111–147 added par. (5). 2009—Subsec. (d)(14). Pub. L. 111–5 added par. (14). 2008—Subsec. (d)(1)(G). Pub. L. 110–246, § 4002(b)(1)(D), (2)(O), substituted ‘‘supplemental nutrition assistance program benefits’’ for ‘‘food stamp’’. Subsec. (d)(3)(A)(i). Pub. L. 110–246, § 4002(b)(1)(A), (B), (2)(O), substituted ‘‘Food and Nutrition Act of 2008’’ for ‘‘Food Stamp Act of 1977’’ and ‘‘supplemental nutrition assistance program’’ for ‘‘food stamp program’’. Subsec. (d)(8)(A). Pub. L. 110–246, § 4002(b)(1)(D), (2)(O), substituted ‘‘supplemental nutrition assistance pro- gram benefits’’ for ‘‘food stamp’’ in introductory provi- sions. Subsec. (d)(8)(A)(ii)(I). Pub. L. 110–246, § 4002(b)(1)(A), (B), (2)(O), substituted ‘‘Food and Nutrition Act of 2008’’ for ‘‘Food Stamp Act of 1977’’ and ‘‘supplemental nutrition assistance program’’ for ‘‘food stamp pro- gram’’. Subsec. (d)(8)(A)(ii)(II). Pub. L. 110–246, § 4002(b)(1)(B), (2)(O), substituted ‘‘Food and Nutrition Act of 2008’’ for ‘‘Food Stamp Act of 1977’’. Subsec. (d)(8)(B). Pub. L. 110–246, § 4002(b)(1)(A), (2)(O), substituted ‘‘supplemental nutrition assistance pro- gram’’ for ‘‘food stamp program’’. 2007—Subsec. (b)(3). Pub. L. 110–28, § 8211(d)(2), sub- stituted ‘‘Limitation on’’ for ‘‘Only first $6,000 of’’ in heading and inserted ‘‘($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii))’’ before period at end. Subsec. (c)(4)(B). Pub. L. 110–28, § 8211(a), substituted ‘‘August 31, 2011’’ for ‘‘December 31, 2007’’. Subsec. (d)(1)(D). Pub. L. 110–28, § 8211(b)(2), amended subpar. (D) generally. Prior to amendment, subpar. (D) read as follows: ‘‘a high-risk youth,’’. Subsec. (d)(3)(A). Pub. L. 110–28, § 8211(d)(1)(A), sub- stituted ‘‘agency as—’’ and cls. (i) and (ii) for ‘‘agency as being a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date.’’ Subsec. (d)(3)(C). Pub. L. 110–28, § 8211(d)(1)(B), added subpar. (C). Subsec. (d)(5). Pub. L. 110–28, § 8211(b)(1), amended heading and text of par. (5) generally. Prior to amend- ment, text read as follows: ‘‘(A) IN GENERAL.—The term ‘high-risk youth’ means any individual who is certified by the designated local agency— ‘‘(i) as having attained age 18 but not age 25 on the hiring date, and ‘‘(ii) as having his principal place of abode within an empowerment zone, enterprise community, or re- newal community. ‘‘(B) YOUTH MUST CONTINUE TO RESIDE IN ZONE OR COM- MUNITY.—In the case of a high-risk youth, the term ‘qualified wages’ shall not include wages paid or in- curred for services performed while such youth’s prin- cipal place of abode is outside an empowerment zone, enterprise community, or renewal community.’’ Subsec. (d)(6)(B)(iii). Pub. L. 110–28, § 8211(c), added cl. (iii). 2006—Subsec. (c)(4)(B). Pub. L. 109–432, § 105(a), sub- stituted ‘‘2007’’ for ‘‘2005’’. Subsec. (d)(1)(I). Pub. L. 109–432, § 105(e)(1), added sub- par. (I). Subsec. (d)(4). Pub. L. 109–432, § 105(b), inserted ‘‘and’’ at end of subpar. (A), substituted a period for ‘‘, and’’ at end of subpar. (B), and struck out subpar. (C) and concluding provisions which read as follows: ‘‘(C) as being a member of a family which had an in- come during the 6 months immediately preceding the earlier of the month in which such income determina- tion occurs or the month in which the hiring date oc- curs, which, on an annual basis, would be 70 percent or less of the Bureau of Labor Statistics lower living standard. Any determination under subparagraph (C) shall be valid for the 45-day period beginning on the date such determination is made.’’ Subsec. (d)(8)(A)(i). Pub. L. 109–432, § 105(c), sub- stituted ‘‘40’’ for ‘‘25’’. Subsec. (d)(10) to (12). Pub. L. 109–432, § 105(e)(2), added par. (10) and redesignated former pars. (10) and (11) as (11) and (12), respectively. Former par. (12) redesignated (13). Subsec. (d)(12)(A)(ii)(II). Pub. L. 109–432, § 105(d), sub- stituted ‘‘28th day’’ for ‘‘21st day’’. Subsec. (d)(13). Pub. L. 109–432, § 105(e)(2), redesig- nated par. (12) as (13). Page 394 TITLE 26—INTERNAL REVENUE CODE § 51 Subsec. (e). Pub. L. 109–432, § 105(e)(3), added subsec. (e). 2004—Subsec. (c)(4)(B). Pub. L. 108–311, § 303(a)(1), sub- stituted ‘‘2005’’ for ‘‘2003’’. Subsec. (i)(1)(A), (B). Pub. L. 108–311, § 207(5)(A), sub- stituted ‘‘subparagraphs (A) through (G) of section 152(d)(2)’’ for ‘‘paragraphs (1) through (8) of section 152(a)’’. Subsec. (i)(1)(C). Pub. L. 108–311, § 207(5)(B), sub- stituted ‘‘152(d)(2)(H)’’ for ‘‘152(a)(9)’’. 2002—Subsec. (c)(4)(B). Pub. L. 107–147 substituted ‘‘2003’’ for ‘‘2001’’. 2000—Subsec. (d)(2)(B). Pub. L. 106–554, § 1(a)(7) [title III, § 316(a)], substituted ‘‘program funded’’ for ‘‘plan approved’’ and struck out ‘‘(relating to assistance for needy families with minor children)’’ after ‘‘Social Se- curity Act’’. Subsec. (d)(5)(A)(ii). Pub. L. 106–554, § 1(a)(7) [title I, § 102(a)], substituted ‘‘empowerment zone, enterprise community, or renewal community’’ for ‘‘empower- ment zone or enterprise community’’. Subsec. (d)(5)(B). Pub. L. 106–554, § 1(a)(7) [title I, § 102(a), (c)], inserted ‘‘or community’’ after ‘‘zone’’ in heading and substituted ‘‘empowerment zone, enter- prise community, or renewal community’’ for ‘‘em- powerment zone or enterprise community’’ in text. Subsec. (d)(7)(A)(iv). Pub. L. 106–554, § 1(a)(7) [title I, § 102(b)], substituted ‘‘empowerment zone, enterprise community, or renewal community’’ for ‘‘empower- ment zone or enterprise community’’. Subsec. (d)(7)(C). Pub. L. 106–554, § 1(a)(7) [title I, § 102(c)], inserted ‘‘or community’’ after ‘‘zone’’ in head- ing. 1999—Subsec. (c)(4)(B). Pub. L. 106–170, § 505(a), sub- stituted ‘‘December 31, 2001’’ for ‘‘June 30, 1999’’. Subsec. (i)(2). Pub. L. 106–170, § 505(b), struck out ‘‘during which he was not a member of a targeted group’’ before period at end. 1998—Subsec. (c)(4)(B). Pub. L. 105–277, § 1002(a), sub- stituted ‘‘June 30, 1999’’ for ‘‘June 30, 1998’’. Subsec. (d)(6)(B)(i). Pub. L. 105–277, § 4006(c)(1), sub- stituted ‘‘plan for employment’’ for ‘‘rehabilitation plan’’. 1997—Subsec. (a). Pub. L. 105–34, § 603(d)(1), sub- stituted ‘‘40 percent’’ for ‘‘35 percent’’. Subsec. (c)(4)(B). Pub. L. 105–34, § 603(a), substituted ‘‘June 30, 1998’’ for ‘‘September 30, 1997’’. Subsec. (d)(1)(H). Pub. L. 105–34, § 603(c)(1), added sub- par. (H). Subsec. (d)(2)(A). Pub. L. 105–34, § 603(b)(1), sub- stituted ‘‘for any 9 months during the 18-month period ending on the hiring date’’ for ‘‘for at least a 9-month period ending during the 9-month period ending on the hiring date’’. Subsec. (d)(3)(A). Pub. L. 105–34, § 603(b)(2), amended heading and text of subpar. (A) generally. Prior to amendment, text read as follows: ‘‘The term ‘qualified veteran’ means any veteran who is certified by the des- ignated local agency as being— ‘‘(i) a member of a family receiving assistance under a IV–A program (as defined in paragraph (2)(B)) for at least a 9-month period ending during the 12- month period ending on the hiring date, or ‘‘(ii) a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending dur- ing the 12-month period ending on the hiring date.’’ Subsec. (d)(9). Pub. L. 105–34, § 603(c)(2), added par. (9). Former par. (9) redesignated (10). Pub. L. 105–33 repealed Pub. L. 104–193, § 110(l)(1). See 1996 Amendment note below. Subsec. (d)(10) to (12). Pub. L. 105–34, § 603(c)(2), redes- ignated pars. (9) to (11) as (10) to (12), respectively. Subsec. (i)(3). Pub. L. 105–34, § 603(d)(2), amended head- ing and text of par. (3) generally. Prior to amendment, text read as follows: ‘‘No wages shall be taken into ac- count under subsection (a) with respect to any indi- vidual unless such individual either— ‘‘(A) is employed by the employer at least 180 days (20 days in the case of a qualified summer youth em- ployee), or ‘‘(B) has completed at least 400 hours (120 hours in the case of a qualified summer youth employee) of services performed for the employer.’’ 1996—Subsec. (a). Pub. L. 104–188, § 1201(a), (e)(1), sub- stituted ‘‘work opportunity credit’’ for ‘‘targeted jobs credit’’ and ‘‘35 percent’’ for ‘‘40 percent’’. Subsec. (c)(1). Pub. L. 104–188, § 1201(f), struck out ‘‘, subsection (d)(8)(D),’’ after ‘‘this subsection’’. Subsec. (c)(4). Pub. L. 104–188, § 1201(d), amended par. (4) generally. Prior to amendment, par. (4) read as fol- lows: ‘‘TERMINATION.—The term ‘wages’ shall not in- clude any amount paid or incurred to an individual who begins work for the employer after December 31, 1994.’’ Subsec. (d). Pub. L. 104–188, § 1201(b), reenacted head- ing without change and amended text generally, revis- ing and restating as pars. (1) to (11) provisions formerly contained in pars. (1) to (16). Subsec. (d)(9). Pub. L. 104–193, § 110(l)(1), which di- rected amendment of par. (9) by striking all that fol- lows ‘‘agency as’’ and inserting ‘‘being eligible for fi- nancial assistance under part A of title IV of the Social Security Act and as having continually received such financial assistance during the 90-day period which im- mediately precedes the date on which such individual is hired by the employer.’’, was repealed by Pub. L. 105–33. Subsec. (g). Pub. L. 104–188, § 1201(e)(1), substituted ‘‘work opportunity credit’’ for ‘‘targeted jobs credit’’. Subsec. (i)(3). Pub. L. 104–188, § 1201(c), amended par. (3) generally. Prior to amendment, par. (3) read as fol- lows: ‘‘INDIVIDUALS NOT MEETING MINIMUM EMPLOYMENT PERIOD.—No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either— ‘‘(A) is employed by the employer at least 90 days (14 days in the case of an individual described in sub- section (d)(12)), or ‘‘(B) has completed at least 120 hours (20 hours in the case of an individual described in subsection (d)(12)) of services performed for the employer.’’ Subsec. (j). Pub. L. 104–188, § 1201(e)(5), substituted ‘‘Work opportunity credit’’ for ‘‘Targeted jobs credit’’ in heading. 1993—Subsec. (c)(4). Pub. L. 103–66, § 13102(a), sub- stituted ‘‘December 31, 1994’’ for ‘‘June 30, 1992’’. Subsec. (i)(1)(A). Pub. L. 103–66, § 13302(d), inserted ‘‘, or, if the taxpayer is an entity other than a corpora- tion, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits inter- ests in the entity,’’ after ‘‘of the corporation’’. 1991—Subsec. (c)(4). Pub. L. 102–227 substituted ‘‘June 30, 1992’’ for ‘‘December 31, 1991’’. 1990—Subsec. (c)(4). Pub. L. 101–508 substituted ‘‘De- cember 31, 1991’’ for ‘‘September 30, 1990’’. 1989—Subsec. (c)(4). Pub. L. 101–239, § 7103(a), sub- stituted ‘‘September 30, 1990’’ for ‘‘December 31, 1989’’. Subsec. (d)(16)(C). Pub. L. 101–239, § 7103(c)(1), added subpar. (C). 1988—Subsec. (c)(2)(B). Pub. L. 100–485 substituted ‘‘section 482(e)’’ for ‘‘section 414’’. Subsec. (c)(4). Pub. L. 100–647, § 4010(a), substituted ‘‘1989’’ for ‘‘1988’’. Subsec. (d)(3)(B). Pub. L. 100–647, § 4010(c)(1), sub- stituted ‘‘age 23’’ for ‘‘age 25’’. Subsec. (d)(12)(B). Pub. L. 100–647, § 4010(d)(1), redesig- nated former cls. (ii) and (iii) as (i) and (ii), respec- tively, and struck out former cl. (i) which provided that subsection (a) shall be applied by substituting ‘‘85 per- cent’’ for ‘‘40 percent’’. Pub. L. 100–647, § 1017(a), substituted ‘‘subsection (a)’’ for ‘‘subsection (a)(1)’’ in cl. (i). 1987—Subsec. (c)(3), (4). Pub. L. 100–203 added par. (3) and redesignated former par. (3) as (4). 1986—Subsec. (a). Pub. L. 99–514, § 1701(b)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: ‘‘For purposes of section 38, the amount of the targeted jobs credit determined under this sec- tion for the taxable year shall be the sum of— ‘‘(1) 50 percent of the qualified first-year wages for such year, and ‘‘(2) 25 percent of the qualified second-year wages for such year.’’ Page 395 TITLE 26—INTERNAL REVENUE CODE § 51 Subsec. (b)(3), (4). Pub. L. 99–514, § 1701(b)(2)(A), redes- ignated par. (4) as (3) and struck out ‘‘, and the amount of the qualified second-year wages,’’ after ‘‘first-year wages’’ and struck out par. (3) which defined ‘‘qualified second-year wages’’. Subsec. (c)(3). Pub. L. 99–514, § 1701(a), substituted ‘‘December 31, 1988’’ for ‘‘December 31, 1985’’. Subsec. (d)(12)(B). Pub. L. 99–514, § 1701(b)(2)(B), in cl. (i), substituted ‘‘40 percent’’ for ‘‘50 percent’’, struck out cl. (ii) which directed that subsecs. (a)(2) and (b)(3) were not to apply, redesignated cl. (iii) as cl. (ii), redes- ignated cl. (iv) as cl. (iii), and in cl. (iii) as so redesig- nated substituted ‘‘subsection (b)(3)’’ for ‘‘subsection (b)(4)’’. Subsec. (i)(3). Pub. L. 99–514, § 1701(c), added par. (3). Subsec. (k). Pub. L. 99–514, § 1878(f)(1), redesignated subsec. (j) added by section 1041(c)(1) of Pub. L. 98–369 and relating to treatment of successor employers, and employees performing services for other persons, as subsec. (k). 1984—Subsec. (a). Pub. L. 98–369, § 474(p)(1), sub- stituted ‘‘For purposes of section 38, the amount of the targeted jobs credit determined under this section’’ for ‘‘The amount of the credit allowable by section 44B’’ in introductory provisions. Subsec. (b)(2). Pub. L. 98–369, § 1041(c)(4), struck out ‘‘(or, in the case of a vocational rehabilitation referral, the day the individual begins work for the employer on or after the beginning of such individual’s rehabilita- tion plan)’’ after ‘‘begins work for the employer’’. Subsec. (c)(2). Pub. L. 98–369, § 2638(b), designated ex- isting provisions as subpar. (A), inserted par. (2) head- ing, and added subpar. (B). Subsec. (c)(3). Pub. L. 98–369, § 1041(a), substituted ‘‘December 31, 1985’’ for ‘‘December 31, 1984’’. Subsec. (d)(6)(B)(ii). Pub. L. 98–369, § 2663(j)(5)(A), sub- stituted ‘‘Secretary of Health and Human Services’’ for ‘‘Secretary of Health Education and Welfare’’. Subsec. (d)(11). Pub. L. 98–369, § 712(n), made deter- mination respecting membership of a qualified summer youth employee or youth participating in a qualified cooperative education program with respect to an em- ployer applicable for purposes of determining whether such individual is a member of another targeted group with respect to such employer. Subsec. (d)(12)(A)(ii). Pub. L. 98–369, § 1041(c)(3), sub- stituted ‘‘(or if later, on May 1 of the calendar year in- volved)’’ for ‘‘(as defined in paragraph (14))’’. Subsec. (d)(16)(A). Pub. L. 98–369, § 1041(c)(2), inserted ‘‘For purposes of the preceding sentence, if on or before the day on which such individual begins work for the employer, such individual has received from a des- ignated local agency (or other agency or organization designated pursuant to a written agreement with such designated local agency) a written preliminary deter- mination that such individual is a member of a tar- geted group, then ‘the fifth day’ shall be substituted for ‘the day’ in such sentence.’’ Subsec. (g). Pub. L. 98–369, § 474(p)(2), substituted ‘‘the targeted jobs credit determined under this subpart’’ for ‘‘the credit provided by section 44B’’. Subsec. (j). Pub. L. 98–369, § 1041(c)(1), added subsec. (j) relating to treatment of successor employers, and em- ployees performing services for other persons. Pub. L. 98–369, § 474(p)(3), added subsec. (j) relating to election to have targeted jobs credit not apply. 1983—Subsec. (d)(8)(D). Pub. L. 97–448, § 102(l)(1), sub- stituted ‘‘clauses (i), (ii), and (iii) of subparagraph (A)’’ for ‘‘subparagraph (A)’’. Subsec. (d)(9)(B). Pub. L. 97–448, § 102(l)(3), substituted ‘‘section 432(b)(1) or 445’’ for ‘‘section 432(b)(1)’’. Subsec. (d)(11). Pub. L. 97–448, § 102(l)(4), substituted ‘‘the earlier of the month in which such determination occurs or the month in which the hiring date occurs’’ for ‘‘the month in which such determination occurs’’. 1982—Subsec. (c)(3). Pub. L. 97–248, § 233(a), sub- stituted ‘‘1984’’ for ‘‘1982’’. Subsec. (d)(1)(J). Pub. L. 97–248, § 233(b)(3), added sub- par. (J). Subsec. (d)(6)(B)(i)(II). Pub. L. 97–248, § 233(d), sub- stituted ‘‘consists of money payments or voucher or scrip, and’’ for ‘‘consists of money payments’’. Subsec. (d)(10). Pub. L. 97–248, § 233(c), inserted provi- sion respecting nonapplicability of paragraph to indi- viduals who begin work for the employer after Decem- ber 31, 1982. Subsec. (d)(12) to (15). Pub. L. 97–248, § 233(b)(4), (5), added par. (12) and redesignated former pars. (12) to (15) as (13) to (16), respectively. Subsec. (d)(16). Pub. L. 97–248, § 233(b)(4), redesignated former par. (15) as (16). Pub. L. 97–248, § 233(f), substituted ‘‘on or before’’ for ‘‘before’’ in subpar. (A). 1981—Subsec. (c)(3), (4). Pub. L. 97–34, § 261(b)(2)(B)(ii), redesignated par. (4) as (3). Former par. (3), which ex- cluded from term ‘‘wages’’ any amount paid or incurred by the employer to an individual with respect to whom the employer claims credit under section 40 of this title, was struck out. Pub. L. 97–34, § 261(a), extended termination date to Dec. 31, 1982, from Dec. 31, 1981, and inserted ‘‘to an in- dividual who begins work for the employer’’ after ‘‘paid or incurred’’. Subsec. (d)(1)(H), (I). Pub. L. 97–34, § 261(b)(1), added subpars. (H) and (I). Subsec. (d)(3)(A)(ii). Pub. L. 97–34, § 261(b)(2)(B)(iii), substituted ‘‘paragraph (11)’’ for ‘‘paragraph (9)’’. Subsec. (d)(4). Pub. L. 97–34, § 261(b)(2)(B)(iii), (3), in subpar. (B) inserted ‘‘and’’ after ‘‘States,’’ in subpar. (C) substituted ‘‘paragraph (11)’’ for ‘‘paragraph (9)’’, and struck out ‘‘(D) not having attained the age of 35 on the hiring date.’’ Subsec. (d)(7)(B). Pub. L. 97–34, § 261(b)(2)(B)(iii), sub- stituted ‘‘paragraph (11)’’ for ‘‘paragraph (9)’’. Subsec. (d)(8)(A)(iv). Pub L. 97–34, § 261(b)(4), added cl. (iv). Subsec. (d)(9), (10). Pub. L. 97–34, § 261(b)(2)(A), added pars. (9) and (10) and redesignated former pars. (9) and (10) as (11) and (12), respectively. Subsec. (d)(11). Pub. L. 97–34, § 261(b)(2)(A), (c)(2), re- designated former par. (9) as (11), substituted ‘‘70 per- cent or less’’ for ‘‘less than 70 percent’’, and provided for validity of any determination for 45-day period be- ginning on the date the determination is made. Former par. (11) redesignated (13). Subsec. (d)(12), (13). Pub. L. 97–34, § 261(b)(2)(A), redes- ignated former pars. (10) and (11) as pars. (12) and (13), respectively. Former par. (12) redesignated (14). Subsec. (d)(14). Pub. L. 97–34, § 261(f)(1)(A), substituted as definition for term ‘‘ ‘designated local agency’ means a State employment security agency established in ac- cordance with the Act of June 6, 1933, as amended (29 U.S.C. 49–49n)’’ for ‘‘ ‘designated local agency’ means the agency for any locality designated jointly by the Secretary and the Secretary of Labor to perform cer- tification of employees for employers in that locality’’. Pub. L. 97–34, § 261(b)(2)(A), redesignated former par. (12) as (14). Subsec. (d)(15). Pub. L. 97–34, § 261(c)(1), added par. (15). Subsec. (e). Pub. L. 97–34, § 261(e)(1), struck out sub- sec. (e) which set forth limitation that qualified first- year wages could not exceed 30 percent of FUTA wages for all employees. Subsec. (f). Pub. L. 97–34, § 261(e)(2), substituted ‘‘any taxable year’’ for ‘‘any year’’ in pars. (1) and (2) and struck out par. (3), defining ‘‘year’’ which is covered in pars. (1) and (2). Subsec. (g). Pub. L. 97–34, § 261(f)(1)(B), substituted ‘‘United States Employment Service’’ for ‘‘Secretary of Labor’’ in heading and text. Subsec. (i). Pub. L. 97–34, § 261(d), added subsec. (i). 1980—Subsec. (c)(1). Pub. L. 96–222, § 103(a)(6)(E)(ii), substituted ‘‘, subsection (d)(8)(D), and subsection (h)(2)’’ for ‘‘subsection (h)(2)’’. Subsec. (c)(2). Pub. L. 96–222, § 103(a)(6)(G)(iii), in- serted ‘‘or incurred’’ after ‘‘amounts paid’’. Subsec. (c)(4). Pub. L. 96–222, § 103(a)(6)(A), substituted ‘‘December 31, 1981’’ for ‘‘December 31, 1980’’. Subsec. (d)(1)(E). Pub. L. 96–222, § 103(a)(6)(G)(iv), struck out ‘‘or’’ after ‘‘recipient,’’. Subsec. (d)(4)(A)(i). Pub. L. 96–222, § 103(a)(6)(G)(v), substituted ‘‘active duty’’ for ‘‘active day’’. Page 396 TITLE 26—INTERNAL REVENUE CODE § 51 Subsec. (d)(4)(B). Pub. L. 96–222, § 103(a)(6)(G)(vi), sub- stituted ‘‘preemployment’’ for ‘‘premployment’’. Subsec. (d)(5). Pub. L. 96–222, § 103(a)(6)(G)(vii), sub- stituted ‘‘preemployment’’ for ‘‘pre-employment’’. Subsec. (d)(8)(A). Pub. L. 96–222, § 103(a)(6)(F), sub- stituted ‘‘age 20’’ for ‘‘age 19’’. Subsec. (d)(8)(D). Pub. L. 96–222, § 103(a)(6)(E)(i), in heading substituted ‘‘Wages’’ for ‘‘Individual must be currently pursuing program’’ and in text substituted ‘‘In the case of remuneration’’ for ‘‘Wages shall be taken into account with respect to a qualified coopera- tive education program only if the wages are’’ and in- serted ‘‘, wages, and unemployment insurance wages, shall be determined without regard to section 3306(c)(10)(C)’’. Subsec. (d)(12). Pub. L. 96–222, § 103(a)(6)(G)(viii), sub- stituted ‘‘employers’’ for ‘‘employer’’. Subsec. (e). Pub. L. 96–222, § 103(a)(6)(G)(ix), inserted ‘‘except as provided in subsection (h)(1)’’ after ‘‘the pre- ceding sentence,’’. 1978—Pub. L. 95–600 amended section generally and limited allowance of credit to the hiring of seven target groups with high unemployment rates. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–260, div. EE, title I, § 113(b), Dec. 27, 2020, 134 Stat. 3050, provided that: ‘‘The amendment made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2020.’’ EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116–94, div. Q, title I, § 143(b), Dec. 20, 2019, 133 Stat. 3234, provided that: ‘‘The amendment made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2019.’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–113, div. Q, title I, § 142(c), Dec. 18, 2015, 129 Stat. 3056, provided that: ‘‘(1) EXTENSION.—The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after December 31, 2014. ‘‘(2) MODIFICATION.—The amendments made by sub- section (b) [amending this section] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2015.’’ EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113–295, div. A, title I, § 119(b), Dec. 19, 2014, 128 Stat. 4015, provided that: ‘‘The amendment made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2013.’’ EFFECTIVE DATE OF 2013 AMENDMENT Pub. L. 112–240, title III, § 309(b), Jan. 2, 2013, 126 Stat. 2329, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to individuals who begin work for the employer after December 31, 2011.’’ EFFECTIVE DATE OF 2011 AMENDMENT Pub. L. 112–56, title II, § 261(g), Nov. 21, 2011, 125 Stat. 732, provided that: ‘‘The amendments made by this sec- tion [amending this section and sections 52 and 3111 of this title] shall apply to individuals who begin work for the employer after the date of the enactment of this Act [Nov. 21, 2011].’’ EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111–312, title VII, § 757(b), Dec. 17, 2010, 124 Stat. 3322, provided that: ‘‘The amendment made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after the date of the enactment of this Act [Dec. 17, 2010].’’ Pub. L. 111–147, title I, § 101(e), Mar. 18, 2010, 124 Stat. 75, provided that: ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this subsection [probably should be ‘‘section’’, amending this section and sec- tions 3111 and 3221 of this title] shall apply to wages paid after the date of the enactment of this Act [Mar. 18, 2010]. ‘‘(2) RAILROAD RETIREMENT TAXES.—The amendments made by subsection (d) [amending section 3221 of this title] shall apply to compensation paid after the date of the enactment of this Act.’’ EFFECTIVE DATE OF 2009 AMENDMENT Pub. L. 111–5, div. B, title I, § 1221(b), Feb. 17, 2009, 123 Stat. 338, provided that: ‘‘The amendments made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2008.’’ EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, except as other- wise provided, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of Title 7, Agriculture. Amendment by section 4002(b)(1)(A), (B), (D), (2)(O) of Pub. L. 110–246 effective Oct. 1, 2008, see section 4407 of Pub. L. 110–246, set out as a note under section 1161 of Title 2, The Congress. EFFECTIVE DATE OF 2007 AMENDMENT Pub. L. 110–28, title VIII, § 8211(e), May 25, 2007, 121 Stat. 192, provided that: ‘‘The amendments made by this section [amending this section] shall apply to indi- viduals who begin work for the employer after the date of the enactment of this Act [May 25, 2007].’’ EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–432, div. A, title I, § 105(f), Dec. 20, 2006, 120 Stat. 2938, provided that: ‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section 51A of this title and repealing sec- tion 51A of this title] shall apply to individuals who begin work for the employer after December 31, 2005. ‘‘(2) CONSOLIDATION.—The amendments made by sub- sections (b), (c), (d), and (e) [amending this section and repealing section 51A of this title] shall apply to indi- viduals who begin work for the employer after Decem- ber 31, 2006.’’ EFFECTIVE DATE OF 2004 AMENDMENT Amendment by section 207(5) of Pub. L. 108–311 appli- cable to taxable years beginning after Dec. 31, 2004, see section 208 of Pub. L. 108–311, set out as a note under section 2 of this title. Pub. L. 108–311, title III, § 303(b), Oct. 4, 2004, 118 Stat. 1179, provided that:‘‘The amendments made by this sec- tion [amending this section and section 51A of this title] shall apply to individuals who begin work for the employer after December 31, 2003.’’ EFFECTIVE DATE OF 2002 AMENDMENT Pub. L. 107–147, title VI, § 604(b), Mar. 9, 2002, 116 Stat. 59, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after December 31, 2001.’’ EFFECTIVE DATE OF 2000 AMENDMENT Pub. L. 106–554, § 1(a)(7) [title I, § 102(d)], Dec. 21, 2000, 114 Stat. 2763, 2763A–600, provided that: ‘‘The amend- ments made by this section [amending this section] shall apply to individuals who begin work for the em- ployer after December 31, 2001.’’ Page 397 TITLE 26—INTERNAL REVENUE CODE § 51 Pub. L. 106–554, § 1(a)(7) [title III, § 316(e)], Dec. 21, 2000, 114 Stat. 2763, 2763A–645, provided that: ‘‘The amendments made by this section [amending this sec- tion and sections 219, 401 and 1361 of this title] shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 [Pub. L. 104–188] to which they relate.’’ EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106–170, title V, § 505(c), Dec. 17, 1999, 113 Stat. 1921, provided that: ‘‘The amendments made by this section [amending this section and section 51A of this title] shall apply to individuals who begin work for the employer after June 30, 1999.’’ EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–277, div. J, title I, § 1002(b), Oct. 21, 1998, 112 Stat. 2681–888, provided that: ‘‘The amendment made by this section [amending this section] shall apply to individuals who begin work for the employer after June 30, 1998.’’ EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title VI, § 603(e), Aug. 5, 1997, 111 Stat. 863, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall apply to individuals who begin work for the employer after September 30, 1997.’’ Pub. L. 105–33, title V, § 5518(c), Aug. 5, 1997, 111 Stat. 621, provided that: ‘‘The amendments made by section 5514(a) of this Act [amending this section and sections 3304, 6103, 6334, 6402, and 7523 of this title] shall take ef- fect as if the amendments had been included in section 110 of the Personal Responsibility and Work Oppor- tunity Reconciliation Act of 1996 [Pub. L. 104–193] at the time such section 110 became law.’’ EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–193 effective July 1, 1997, with transition rules relating to State options to accel- erate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substan- tially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of entitlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as an Effective Date note under section 601 of Title 42, The Public Health and Welfare. Amendment by Pub. L. 104–188 applicable to individ- uals who begin work for the employer after Sept. 30, 1996, see section 1201(g) of Pub. L. 104–188, set out as a note under section 38 of this title. EFFECTIVE DATE OF 1993 AMENDMENT Pub. L. 103–66, title XIII, § 13102(b), Aug. 10, 1993, 107 Stat. 420, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to indi- viduals who begin work for the employer after June 30, 1992.’’ EFFECTIVE DATE OF 1991 AMENDMENT Pub. L. 102–227, title I, § 105(b), Dec. 11, 1991, 105 Stat. 1687, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to individuals who begin work for the employer after December 31, 1991.’’ EFFECTIVE DATE OF 1990 AMENDMENT Pub. L. 101–508, title XI, § 11405(c), Nov. 5, 1990, 104 Stat. 1388–473, provided that: ‘‘(1) CREDIT.—The amendment made by subsection (a) [amending this section] shall apply to individuals who begin work for the employer after September 30, 1990. ‘‘(2) AUTHORIZATION.—The amendment made by sub- section (b) [amending provisions set out below] shall apply to fiscal years beginning after 1990.’’ EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title VII, § 7103(c)(2), Dec. 19, 1989, 103 Stat. 2305, provided that: ‘‘The amendment made by paragraph (1) [amending this section] shall apply to in- dividuals who begin work for the employer after De- cember 31, 1989.’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 1017(a) of Pub. L. 100–647 effec- tive, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title. Pub. L. 100–647, title IV, § 4010(c)(2), Nov. 10, 1988, 102 Stat. 3655, provided that: ‘‘The amendment made by paragraph (1) [amending this section] shall apply to in- dividuals who begin work for the employer after De- cember 31, 1988.’’ Pub. L. 100–647, title IV, § 4010(d)(2), Nov. 10, 1988, 102 Stat. 3655, provided that: ‘‘The amendment made by paragraph (1) [amending this section] shall apply to in- dividuals who begin work for the employer after De- cember 31, 1988.’’ Amendment by Pub. L. 100–485 effective Oct. 1, 1990, with provision for earlier effective dates in case of States making certain changes in their State plans and formally notifying the Secretary of Health and Human Services of their desire to become subject to the amendments made by title II of Pub. L. 100–485 on the earlier effective dates, see section 204 of Pub. L. 100–485, set out as a note under section 671 of Title 42, The Pub- lic Health and Welfare. EFFECTIVE DATE OF 1987 AMENDMENT Pub. L. 100–203, title X, § 10601(b), Dec. 22, 1987, 101 Stat. 1330–451, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to amounts paid or incurred on or after January 1, 1987, for services rendered on or after such date.’’ EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XVII, § 1701(e), Oct. 22, 1986, 100 Stat. 2772, provided that: ‘‘The amendments made by this section [amending this section and provisions set out below] shall apply with respect to individuals who begin work for the employer after December 31, 1985.’’ Amendment by section 1878(f)(1) of Pub. L. 99–514 ef- fective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 474(p)(1)–(3) of Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, and to carrybacks from such years, see section 475(a) of Pub. L. 98–369, set out as a note under section 21 of this title. Amendment by section 712 of Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title. Pub. L. 98–369, div. A, title X, § 1041(c)(5), July 18, 1984, 98 Stat. 1043, as amended by Pub. L. 99–514, § 2, title XVIII, § 1878(f)(2), Oct. 22, 1986, 100 Stat. 2095, 2904, pro- vided that: ‘‘(A) IN GENERAL.—Except as provided in subpara- graph (B), the amendments made by this section [amending this section] shall apply to individuals who begin work for the employer after the date of the en- actment of this Act [July 18, 1984]. ‘‘(B) SPECIAL RULE FOR EMPLOYEES PERFORMING SERV- ICES FOR OTHER PERSONS.—Paragraph (2) of section 51(k) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this subsection) and the amendment made by paragraph (3) of this subsection [amending this section] shall apply to individuals who begin work for the employer after December 31, 1984.’’ Pub. L. 98–369, div. B, title VI, § 2638(c)(2), July 18, 1984, 98 Stat. 1144, provided that: ‘‘The amendments Page 398 TITLE 26—INTERNAL REVENUE CODE § 51 made by subsection (b) [amending this section] shall apply with respect to payments made on or after the date of the enactment of this Act [July 18, 1984].’’ Amendment by section 2663 of Pub. L. 98–369 effective July 18, 1984, but not to be construed as changing or af- fecting any right, liability, status or interpretation which existed (under the provisions of law involved) be- fore that date, see section 2664(b) of Pub. L. 98–369, set out as a note under section 401 of Title 42, The Public Health and Welfare. EFFECTIVE DATE OF 1983 AMENDMENT Pub. L. 97–448, title I, § 102(l)(4), Jan. 12, 1983, 96 Stat. 2374, provided that the amendment made by that sec- tion is effective with respect to certifications made after Jan. 12, 1983, with respect to individuals beginning work for an employer after May 11, 1982. Amendment by title I of Pub. L. 97–448 effective, ex- cept as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97–34, to which such amendment relates, see section 109 of Pub. L. 97–448, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title II, § 233(f), Sept. 3, 1982, 96 Stat. 502, provided that the amendments made by that sec- tion are effective only with respect to individuals who begin work for the taxpayer after May 11, 1982. Pub. L. 97–248, title II, § 233(g), Sept. 3, 1982, 96 Stat. 503, provided that: ‘‘(1) SUBSECTION (b).—The amendments made by sub- section (b) [amending this section] shall apply to amounts paid or incurred after April 30, 1983, to individ- uals beginning work for the employer after such date. ‘‘(2) SUBSECTION (d).—The amendments made by sub- section (d) [amending this section] shall apply to amounts paid or incurred after July 1, 1982, to individ- uals beginning work for the employer after such date.’’ EFFECTIVE DATE OF 1981 AMENDMENT Pub. L. 97–34, title II, § 261(g), Aug. 13, 1981, 95 Stat. 263, as amended by Pub. L. 97–448, title I, § 102(l)(2), Jan. 12, 1983, 96 Stat. 2374; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(1) AMENDMENTS RELATING TO MEMBERS OF TARGETED GROUPS.— ‘‘(A) IN GENERAL.—Except as provided in subpara- graphs (B), (C), and (D), the amendments made by subsections (b), (c)(2), and (d) [amending this section and section 50B of this title] shall apply to wages paid or incurred with respect to individuals first beginning work for an employer after the date of the enactment of this Act [Aug. 13, 1981] in taxable years ending after such date. ‘‘(B) ELIGIBLE WORK INCENTIVE EMPLOYEES.—The amendments made by subsection (b)(2) [amending this section] to the extent relating to the designation of eligible work incentive employees (within the meaning of section 51(d)(9) [now 51(d)(10)] of the In- ternal Revenue Code of 1986 [formerly I.R.C. 1954]) as members of a targeted group and subsection (b)(2)(B)(ii) [amending this section] shall apply to taxable years beginning after December 31, 1981. In the case of an eligible work incentive employee, sub- sections (a) and (b) of section 51 of such Code shall be applied for taxable years beginning after December 31, 1981, as if such employees had been members of a targeted group for taxable years beginning before January 1, 1982. ‘‘(C) COOPERATIVE EDUCATION PROGRAM PARTICI- PANTS.—The amendments made by subsection (b)(4) [amending this section] shall apply to wages paid or incurred after December 31, 1981, in taxable years ending after such date. ‘‘(D) DESIGNATED LOCAL AGENCY.—The amendments made by subsection (f)(1) [amending this section] shall take effect on the date 60 days after the date of the enactment of this act [Aug. 13, 1981]. ‘‘(2) CERTIFICATIONS.— ‘‘(A) IN GENERAL.—The amendment made by sub- section (c)(1) [amending this section] shall apply to all individuals whether such individuals began work for their employer before, on, or after the date of the enactment of this Act [Aug. 13, 1981]. ‘‘(B) SPECIAL RULE FOR INDIVIDUALS WHO BEGAN WORK FOR THE EMPLOYER BEFORE 45TH DAY BEFORE DATE OF ENACTMENT.—In the case of any individual (other than an individual described in section 51(d)(8) of the Internal Revenue Code of 1986) who began work for the employer before the date 45 days before the date of the enactment of this Act [Aug. 13, 1981], para- graph (15) of section 51(d) of the Internal Revenue Code of 1986 (as added by subsection (c)(1)) shall be applied by substituting ‘July 23, 1981,’ for the day on which such individual begins work for the employer. ‘‘(C) INDIVIDUALS WHO BEGIN WORK FOR EMPLOYER WITHIN 45 DAYS BEFORE OR AFTER DATE OF ENACT- MENT.—In the case of any individual (other than an individual described in section 51(d)(8) of the Internal Revenue Code of 1986) who begins work for the em- ployer during the 90-day period beginning with the date 45 days before the date of the enactment of this Act [Aug. 13, 1981], and in the case of an individual described in section 51(d)(8) of such Code who begins work before the end of such 90-day period, paragraph (15) of section 51(d) of such Code (as added by sub- section (c)(1)) shall be applied by substituting ‘the last day of the 90-day period beginning with the date 45 days before the date of the enactment of this Act’ for the day on which such individual begins work for the employer. ‘‘(3) LIMITATION ON QUALIFIED FIRST-YEAR WAGES.—The amendment made by subsection (e) [amending this sec- tion] shall apply to taxable years beginning after De- cember 31, 1981.’’ EFFECTIVE DATE OF 1980 AMENDMENT Pub. L. 96–222, title I, § 103(b)(1), Apr. 1, 1980, 94 Stat. 214, provided that: ‘‘The amendment made by sub- section (a)(5)(F) [probably means subsec. (a)(6)(F), amending this section] shall apply to wages paid or in- curred on or after November 27, 1979, in taxable years ending on or after such date.’’ Amendment by Pub. L. 96–222 effective, except as oth- erwise provided, as if it had been included in the provi- sions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title III, § 321(d)(1), Nov. 6, 1978, 92 Stat. 2835, provided that: ‘‘Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 44B, 52, 53, and 6501 of this title] shall apply to amounts paid or incurred after December 31, 1978, in taxable years ending after such date.’’ EFFECTIVE DATE Pub. L. 95–30, title II, § 202(e), May 23, 1977, 91 Stat. 151, provided that: ‘‘The amendments made by this sec- tion [enacting this section and sections 44B, 52, 53, and 280C of this title and amending sections 56, 381, 383, 6096, 6411, 6501, 6511, 6601, and 6611 of this title] shall apply to taxable years beginning after December 31, 1976, and to credit carrybacks from such years.’’ RETURNING HEROES AND WOUNDED WARRIORS WORK OPPORTUNITY TAX CREDITS; TREATMENT OF POSSES- SIONS OF UNITED STATES Pub. L. 112–56, title II, § 261(f), Nov. 21, 2011, 125 Stat. 731, provided that: ‘‘(1) PAYMENTS TO POSSESSIONS.— ‘‘(A) MIRROR CODE POSSESSIONS.—The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the Page 399 TITLE 26—INTERNAL REVENUE CODE § 51 amendments made by this section [amending this section and sections 52 and 3111 of this title]. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the gov- ernment of the respective possession of the United States. ‘‘(B) OTHER POSSESSIONS.—The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system the amount estimated by the Secretary of the Treas- ury as being equal to the loss to that possession that would have occurred by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sen- tence shall not apply with respect to any possession of the United States unless such possession estab- lishes to the satisfaction of the Secretary that the possession has implemented (or, at the discretion of the Secretary, will implement) an income tax benefit which is substantially equivalent to the income tax credit in effect after the amendments made by this section. ‘‘(2) COORDINATION WITH CREDIT ALLOWED AGAINST UNITED STATES INCOME TAXES.—The credit allowed against United States income taxes for any taxable year under the amendments made by this section to section 51 of the Internal Revenue Code of 1986 [26 U.S.C. 51] to any person with respect to any qualified veteran shall be reduced by the amount of any credit (or other tax benefit described in paragraph (1)(B)) al- lowed to such person against income taxes imposed by the possession of the United States by reason of this subsection with respect to such qualified veteran for such taxable year. ‘‘(3) DEFINITIONS AND SPECIAL RULES.— ‘‘(A) POSSESSION OF THE UNITED STATES.—For pur- poses of this subsection, the term ‘possession of the United States’ includes American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, and the United States Virgin Islands. ‘‘(B) MIRROR CODE TAX SYSTEM.—For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such pos- session under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. ‘‘(C) TREATMENT OF PAYMENTS.—For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from credit provi- sions described in such section.’’ REFERENCE TO PLAN FOR EMPLOYMENT Pub. L. 105–277, div. J, title IV, § 4006(c)(1), Oct. 21, 1998, 112 Stat. 2681–912, provided that: ‘‘The reference to ‘plan for employment’ in such clause [26 U.S.C. 51(d)(6)(B)(i)] shall be treated as including a reference to the rehabilitation plan referred to in such clause as in effect before the amendment made by the preceding sentence.’’ AUTHORIZATION OF APPROPRIATIONS Pub. L. 97–34, title II, § 261(f)(2), Aug. 13, 1981, 95 Stat. 263, as amended by Pub. L. 97–248, title II, § 233(e), Sept. 3, 1982, 96 Stat. 502; Pub. L. 98–369, div. A, title X, § 1041(b), July 18, 1984, 98 Stat. 1042; Pub. L. 99–514, title XVII, § 1701(d), Oct. 22, 1986, 100 Stat. 2772; Pub. L. 100–647, title IV, § 4010(b), Nov. 10, 1988, 102 Stat. 3655; Pub. L. 101–239, title VII, § 7103(b), Dec. 19, 1989, 103 Stat. 2305; Pub. L. 101–508, title XI, § 11405(b), Nov. 5, 1990, 104 Stat. 1388–473, provided that: ‘‘There is authorized to be appropriated for each fiscal year such sums as may be necessary, to carry out the functions described by the amendments made by paragraph (1) [amending this sec- tion], except that, of the amounts appropriated pursu- ant to this paragraph— ‘‘(A) $5,000,000 shall be used to test whether individ- uals certified as members of targeted groups under section 51 of such Code are eligible for such certifi- cation (including the use of statistical sampling tech- niques), and ‘‘(B) the remainder shall be distributed under per- formance standards prescribed by the Secretary of Labor. The Secretary of Labor shall each calendar year begin- ning with calendar year 1983 report to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate with respect to the results of the testing conducted under subparagraph (A) during the preceding calendar year.’’ [For termination, effective May 15, 2000, of reporting provisions in section 261(f)(2) of Pub. L. 97–34, set out above, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and page 124 of House Document No. 103–7.] [Amendment by Pub. L. 101–508 applicable to fiscal years beginning after 1990, see section 11405(c)(2) of Pub. L. 101–508, set out as an Effective Date of 1990 Amend- ment note above.] PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. SPECIAL RULES FOR NEWLY TARGETED GROUPS Pub. L. 95–600, title III, § 321(d)(2), Nov. 6, 1978, 92 Stat. 2835, as amended by Pub. L. 96–222, title I, § 103(a)(6)(C), (G)(xi), Apr. 1, 1980, 94 Stat. 209, 211; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘(A) INDIVIDUAL MUST BE HIRED AFTER SEPTEMBER 26, 1978.—In the case of a member of a newly targeted group, for purposes of applying the amendments made by this section— ‘‘(i) such individual shall be taken into account for purposes of the credit allowable by section 44B of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] only if such individual is first hired by the employer after September 26, 1978, and ‘‘(ii) such individual shall be treated for purposes of such credit as having first begun work for the em- ployer not earlier than January 1, 1979. ‘‘(B) MEMBER OF NEWLY TARGETED GROUP DEFINED.— For purposes of subparagraph (A), an individual is a member of a newly targeted group if— ‘‘(i) such individual meets the requirements of paragraph (1) of section 51(d) of such Code, and ‘‘(ii) in the case of an individual meeting the re- quirements of subparagraph (A) of such paragraph (1), a credit was not claimed for such individual by the taxpayer for a taxable year beginning before January 1, 1979.’’ CREDIT ALLOWABLE BY SECTION 44B IN CASE OF TAX- ABLE YEAR BEGINNING IN 1978 AND ENDING AFTER DECEMBER 31, 1978 Pub. L. 95–600, title III, § 321(d)(3), Nov. 6, 1978, 92 Stat. 2836, as amended by Pub. L. 96–222, title I, § 103(a)(6)(D), Apr. 1, 1980, 94 Stat. 209; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘‘In the case of a taxable year which begins in 1978 and ends after December 31, 1978, the amount of the credit determined under section 51 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall be the sum of— ‘‘(A) the amount of the credit which would be so de- termined without regard to the amendments made by this section, plus ‘‘(B) the amount of the credit which would be so de- termined by reason of the amendments made by this section.’’ Page 400 TITLE 26—INTERNAL REVENUE CODE [§ 51A [§ 51A. Repealed. Pub. L. 109–432, div. A, title I, § 105(e)(4)(A), Dec. 20, 2006, 120 Stat. 2937] Section, added Pub. L. 105–34, title VIII, § 801(a), Aug. 5, 1997, 111 Stat. 869; amended Pub. L. 105–277, div. J, title I, § 1003, Oct. 21, 1998, 112 Stat. 2681–888; Pub. L. 106–170, title V, § 505(a), Dec. 17, 1999, 113 Stat. 1921; Pub. L. 107–16, title IV, § 411(c), June 7, 2001, 115 Stat. 63; Pub. L. 107–147, title IV, § 417(4), title VI, § 605(a), Mar. 9, 2002, 116 Stat. 56, 60; Pub. L. 108–311, title III, § 303(a)(2), Oct. 4, 2004, 118 Stat. 1179; Pub. L. 109–432, div. A, title I, § 105(a), Dec. 20, 2006, 120 Stat. 2936, related to tem- porary incentives for employing long-term family as- sistance recipients. See section 51(e) of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal applicable to individuals who begin work for the employer after Dec. 31, 2006, see section 105(f)(2) of Pub. L. 109–432, set out as an Effective Date of 2006 Amendment note under section 51 of this title. § 52. Special rules (a) Controlled group of corporations For purposes of this subpart, all employees of all corporations which are members of the same controlled group of corporations shall be treated as employed by a single employer. In any such case, the credit (if any) determined under sec- tion 51(a) with respect to each such member shall be its proportionate share of the wages giv- ing rise to such credit. For purposes of this sub- section, the term ‘‘controlled group of corpora- tions’’ has the meaning given to such term by section 1563(a), except that— (1) ‘‘more than 50 percent’’ shall be sub- stituted for ‘‘at least 80 percent’’ each place it appears in section 1563(a)(1), and (2) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of sec- tion 1563. (b) Employees of partnerships, proprietorships, etc., which are under common control For purposes of this subpart, under regula- tions prescribed by the Secretary— (1) all employees of trades or business (whether or not incorporated) which are under common control shall be treated as employed by a single employer, and (2) the credit (if any) determined under sec- tion 51(a) with respect to each trade or busi- ness shall be its proportionate share of the wages giving rise to such credit. The regulations prescribed under this subsection shall be based on principles similar to the prin- ciples which apply in the case of subsection (a). (c) Tax-exempt organizations (1) In general No credit shall be allowed under section 38 for any work opportunity credit determined under this subpart to any organization (other than a cooperative described in section 521) which is exempt from income tax under this chapter. (2) Credit made available to qualified tax-ex- empt organizations employing qualified veterans For credit against payroll taxes for employment of qualified veterans by qualified tax-exempt organiza- tions, see section 3111(e). (d) Estates and trusts In the case of an estate or trust— (1) the amount of the credit determined under this subpart for any taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each, and (2) any beneficiary to whom any amount has been apportioned under paragraph (1) shall be allowed, subject to section 38(c), a credit under section 38(a) for such amount. (e) Limitations with respect to certain persons Under regulations prescribed by the Secretary, in the case of— (1) a regulated investment company or a real estate investment trust subject to taxation under subchapter M (section 851 and fol- lowing), and (2) a cooperative organization described in section 1381(a), rules similar to the rules provided in sub- sections (e) and (h) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply in determining the amount of the credit under this subpart. (Added Pub. L. 95–30, title II, § 202(b), May 23, 1977, 91 Stat. 143; amended Pub. L. 95–600, title III, § 321(c)(1), Nov. 6, 1978, 92 Stat. 2835; Pub. L. 96–222, title I, § 103(a)(5), Apr. 1, 1980, 94 Stat. 209; Pub. L. 97–354, § 5(a)(11), Oct. 19, 1982, 96 Stat. 1693; Pub. L. 98–369, div. A, title IV, § 474(p)(4)–(7), July 18, 1984, 98 Stat. 838; Pub. L. 101–508, title XI, § 11813(b)(4), Nov. 5, 1990, 104 Stat. 1388–551; Pub. L. 104–188, title I, § 1616(b)(2), Aug. 20, 1996, 110 Stat. 1856; Pub. L. 105–34, title XVI, § 1601(b), Aug. 5, 1997, 111 Stat. 1087; Pub. L. 112–56, title II, § 261(e)(1), Nov. 21, 2011, 125 Stat. 730.) Editorial Notes REFERENCES IN TEXT The date of the enactment of the Revenue Reconcili- ation Act of 1990, referred to in subsec. (e), is the date of enactment of Pub. L. 101–508, which was approved Nov. 5, 1990. AMENDMENTS 2011—Subsec. (c). Pub. L. 112–56 designated existing provisions as par. (1), inserted heading, and added par. (2). 1997—Subsec. (c). Pub. L. 105–34 substituted ‘‘work op- portunity credit’’ for ‘‘targeted jobs credit’’. 1996—Subsec. (e)(1) to (3). Pub. L. 104–188 redesignated pars. (2) and (3) as (1) and (2), respectively, and struck out former par. (1) which read as follows: ‘‘an organiza- tion to which section 593 (relating to reserves for losses on loans) applies,’’. 1990—Subsec. (e). Pub. L. 101–508 substituted ‘‘section 46 (as in effect on the day before the date of the enact- ment of the Revenue Reconciliation Act of 1990)’’ for ‘‘section 46’’ in concluding provisions. 1984—Subsec. (a). Pub. L. 98–369, § 474(p)(4), sub- stituted ‘‘the credit (if any) determined under section 51(a) with respect to each such member’’ for ‘‘the credit (if any) allowable by section 44B to each such member’’. Subsec. (b)(2). Pub. L. 98–369, § 474(p)(5), substituted ‘‘the credit (if any) determined under section 51(a)’’ for ‘‘the credit (if any) allowable by section 44B’’. Subsec. (c). Pub. L. 98–369, § 474(p)(6), substituted ‘‘credit shall be allowed under section 38 for any tar- geted jobs credit determined under this subpart’’ for ‘‘credit shall be allowed under section 44B’’.