§51A. Temporary incentives for employing long-term family assistance recipients

(a) Determination of amount

For purposes of section 38, the amount of the welfare-to-work credit determined under this section for the taxable year shall be equal to-

(1) 35 percent of the qualified first-year wages for such year, and

(2) 50 percent of the qualified second-year wages for such year.

(b) Qualified wages defined

For purposes of this section-

(1) In general

The term "qualified wages" means the wages paid or incurred by the employer during the taxable year to individuals who are long-term family assistance recipients.

(2) Qualified first-year wages

The term "qualified first-year wages" means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.

(3) Qualified second-year wages

The term "qualified second-year wages" means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning on the day after the last day of the 1-year period with respect to such individual determined under paragraph (2).

(4) Only first $10,000 of wages per year taken into account

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 any individual shall not exceed $10,000 per year.

(5) Wages

(A) In general

The term "wages" has the meaning given such term by section 51(c), without regard to paragraph (4) thereof.

(B) Certain amounts treated as wages

The term "wages" includes amounts paid or incurred by the employer which are excludable from such recipient's gross income under-

(i) section 105 (relating to amounts received under accident and health plans),

(ii) section 106 (relating to contributions by employer to accident and health plans),

(iii) section 127 (relating to educational assistance programs) or would be so excludable but for section 127(d), but only to the extent paid or incurred to a person not related to the employer, or

(iv) section 129 (relating to dependent care assistance programs).

The amount treated as wages by clause (i) or (ii) for any period shall be based on the reasonable cost of coverage for the period, but shall not exceed the applicable premium for the period under section 4980B(f)(4).

(C) Special rules for agricultural and railway labor

If such recipient is an employee to whom subparagraph (A) or (B) of section 51(h)(1) applies, rules similar to the rules of such subparagraphs shall apply except that-

(i) such subparagraph (A) shall be applied by substituting "$10,000" for "$6,000", and

(ii) such subparagraph (B) shall be applied by substituting "$833.33" for "$500".

(c) Long-term family assistance recipients

For purposes of this section-

(1) In general

The term "long-term family assistance recipient" means any individual who is certified by the designated local agency (as defined in section 51(d)(10) ¹)-

(A) as being a member of a family receiving assistance under a IV–A program (as defined in section 51(d)(2)(B)) for at least the 18-month period ending on the hiring date,

(B)(i) as being a member of a family receiving such assistance for 18 months beginning after the date of the enactment of this section, and

(ii) as having a hiring date which is not more than 2 years after the end of the earliest such 18-month period, or

(C)(i) as being a member of a family which ceased to be eligible after the date of the enactment of this section 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 cessation.

(2) Hiring date

The term "hiring date" has the meaning given such term by section 51(d).

(d) Certain rules to apply

(1) In general

Rules similar to the rules of section 52, and subsections (d)(11), (f), (g), (i) (as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997), (j), and (k) of section 51, shall apply for purposes of this section.

(2) Credit to be part of general business credit, etc.

References to section 51 in section 38(b), 280C(a), and 1396(c)(3) shall be treated as including references to this section.

(e) Coordination with work opportunity credit

If a credit is allowed under this section to an employer with respect to an individual for any taxable year, then for purposes of applying section 51 to such employer, such individual shall not be treated as a member of a targeted group for such taxable year.

(f) Termination

This section shall not apply to individuals who begin work for the employer after December 31, 2001.

(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 .)

References in Text

The date of the enactment of this section, referred to in subsec. (c)(1)(B)(i), (C)(i), is the date of enactment of Pub. L. 105–34, which was approved Aug. 5, 1997.

The date of the enactment of the Taxpayer Relief Act of 1997, referred to in subsec. (d)(1), is the date of enactment of Pub. L. 105–34, which was approved Aug. 5, 1997.

Amendments

1999-Subsec. (f). Pub. L. 106–170 substituted "December 31, 2001" for "June 30, 1999".

1998-Subsec. (f). Pub. L. 105–277 substituted "June 30, 1999" for "April 30, 1999".

Effective Date of 1999 Amendment

Amendment by Pub. L. 106–170 applicable to individuals who begin work for the employer after June 30, 1999, see section 505(c) of Pub. L. 106–170, set out as a note under section 51 of this title.

Effective Date

Section 801(c) of Pub. L. 105–34 provided that: "The amendments made by this section [enacting this section] shall apply to individuals who begin work for the employer after December 31, 1997."

¹ So in original. Probably should be section "51(d)(11)".