Summary of Changes

2007 Form 5884 Major Changes
On the Form1] The form is no longer continuous-use because various law changes now and
in the future are facilitated by the annual format, especially with regard to the
instructions (e.g., the line 22 carryback instructions).
2] A Part I heading is added because a Part II has been added to the form,
which increases the line total from 6 lines to 22 lines. The
Part II is added because the credit is no longer subject to the alternative
minimum tax, necessitating its removal from Form 3800.
PL 110-28 sec. 8214; IRC 38(c)(4)(iv)
3] Line 1 is rewritten to remove the text “began work for you before the applicable
date in the instructions and,” because the credit is extended into 2011, a date not
indicated in the instructions.
PL 110-28 sec. 8211; IRC 51(c)(4)(B)
It is also rewritten to accommodate an employer with a fiscal year ending in 2008
that would have paid qualified 2nd year wages in the part of such year which fell
in 2008. Therefore:
• Lines 1a and b are rewritten to add the text "Qualified first-year wages of"
to conform to the language of Form 8861.
•

Line 1c is added to account for the second-year wages and the 50%
reduction.
PL 109-432 sec. 105(e)(2); IRC 51(e)(2)

4] Line 4 is rewritten to remove cooperatives, estates, and trusts because of the
addition of Lines 5-9.
5] Lines 5-9 are necessary because of the addition of Part II. These lines are to
account for passive activities, carryforwards, and carrybacks applicable to
cooperatives, estates, trusts, and other entities. This is because with this credit
cooperatives, estates, and trusts can elect to allocate a portion to patrons or
beneficiaries. Adding these new lines means old lines 5 and 6 are now new
Lines 10 and 11.
PL 110-28 sec. 8214; IRC 38(c)(4)(iv)

6] The year is updated in the usual places.

In the Instructions1] The What’s New area is rewritten to indicate:
• sec. 8211 of PL 110-28 (first 3 bullets: credit extended, vet group
expanded, designated community residents) and
•

sec. 105(e)(2) of PL 109-432; IRC 51(d)(10) (last bullet: long-term family
assistance recipients).

2] Under Targeted group employee:
• A bullet is added for long-term family assistance recipients. PL 109-432
sec. 105(e)(2; IRC 51(d)(10))
•

The high-risk youth targeted group is renamed “Designated community
resident.”
PL 110-28 sec.8211(b); IRC 51(d)(5)

•

Conforming with the Form 8850, the text “qualified” is removed from the
last 3 targeted group bullets - summer youth employee, food stamp
recipient, and SSI recipient.

•

The next-to-last paragraph (re: claiming the welfare-to-work credit negates
any work opportunity credit targeted group designation) is removed
because the two credits cannot possibly apply to the same wages in the
same year. Similarly, a bullet with such information under Qualified
Wages is removed.

3] To conform to the language in the Form 8861 instructions and to leave open
the possibility of qualifying second-year wages, the Qualified Wages area is
rewritten as follows:
•

The heading “Qualified first-year wages” and the first two sentences (re
first-year wages and the maximum amount of such wages) are removed.

•

The text “excluding tips” is removed from the “wages qualifying for the
credit” discussion (now at the beginning of the paragraph).

•

The text “the first $6,000 of” is removed from the agricultural labor
discussion.

4] Also under Qualified Wages, the second bullet in the second set of bullets is
rewritten as two separate bullets, to affecting the terms “high-risk” (redesignated
as “designated community resident”) and “enterprise community” (expired
provision).
IRC 51(d)(5); IRC 1391(d)(1)(A)(ii)

5] The heading ”Members of a controlled group or businesses under
common control” is made a head 2.
6] Part I and Part II headings are added because a Part II has
been added to the form. Therefore, the Part II instructions are entirely new.
7] Instructions for Lines 1a and b are expanded and combined with new Line 1c
instructions to indicate the following:
• First- or second-year wages and the new long-term family assistance
recipients group.
PL 109-432 sec. 105(e)(2); IRC 51(e)(2))
•

The new disabled veterans group, including the greater maximum wages
for such vets, $12,000.
IRC 51(b)(3)(A)

8] New Lines 5, 7, and 8 instructions are added.
9] Old line 5 instructions are renumbered as Line 10 instructions.
10] The year is updated in the usual places.