Your company paid employees who were eligible for work opportunity credit $25,000 last year. Of these wages,

Question:

Your company paid employees who were eligible for work opportunity credit $25,000 last year. Of these wages, $21,000 is eligible for a tax credit of 40% of the wages. The remaining wages are eligible for a tax credit of 25% of the wages. The company’s wages expense must be reduced by the amount of the credit. If the company’s marginal tax rate is 34%, how does this affect your company’s taxes?