§50B — Repealed. Pub. L. 98–369, div. A, title IV, § 474(m)(2), July 18, 1984, 98 Stat. 833]

Statute Text — 26 U.S.C. §50B

Treasury Regulations

• Treas. Reg. §1.50B-1Definitions of WIN expenses and WIN employees Show full text ▾ Collapse ▴

  (a) WIN expenses—(1) In general. Except as otherwise provided in paragraphs (b) through (g) of this section, for purposes of §§ 1.50A-1 through 1.50B-5, the term “work incentive program expenses” (referred to in §§ 1.50A-1 through 1.50B-5 as “WIN expenses”) means the salaries and wages paid or incurred by the taxpayer for services rendered during the first 12 months of employment (whether or not consecutive) by an employee who is certified by the Secretary of Labor as—

  (i) Having been placed in employment by the taxpayer (or if the taxpayer is a partner of a partnership, beneficiary of an estate or trust, or a shareholder of an electing small business corporation, by such partnership, estate, trust, or electing small business corporation) under a work incentive (WIN) program established under section 432(b)(1) of the Social Security Act (42 U.S.C. 632(b)(1)), and

  (ii) Not having displaced any individual from employment.

  The term “WIN expenses” includes only salaries and wages paid or incurred in taxable years beginning after December 31, 1971. See paragraph (c) of § 1.50A-3 for rules relating to the determination of the first 12 months of employment (whether or not consecutive).

  (2) Examples. The provisions of subparagraph (1) of this paragraph may be illustrated by the following examples:

  (b) Salaries and wages. For purposes of this section, the term “salaries and wages” means only cash remuneration including a check. Amounts deducted and withheld from the employee's pay (for example, taxes and contributions to health and retirement plans) shall be deemed to be cash remuneration even though not actually paid directly to the employee.

  (c) Trade or business expenses. The term “WIN expenses” includes only salaries and wages which are paid or incurred in a trade or business of the taxpayer and which are deductible in computing taxable income. Thus, salaries and wages paid to domestic employees in a private home are not “WIN expenses”.

  (d) Reimbursed expenses—(1) In general. The term “WIN expenses” does not include salaries and wages to the extent that the taxpayer is reimbursed for such salaries or wages from any source.

  (2) Example. Subparagraph (1) of this paragraph may be illustrated by the following example:

  (e) Geographical limitation—(1) In general. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered outside the United States (as defined in sections 638 (relating to Continental Shelf areas) and 7701(a)(9). However, services rendered by any WIN employee outside the United States (as defined in sections 638 (relating to Continental Shelf areas) and 7701(a)(9)) shall contribute to such employee's first 12 months of employment (whether or not consecutive) for purposes of paragraph (a) of § 1.50A-3 and paragraph (a) of this section.

  (2) Example. Subparagraph (1) of this paragraph may be illustrated by the following example:

  (f) Maximum period of training or instruction. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered by a WIN employee after the end of the 24-month period beginning with the date of initial employment (as defined in paragraph (c)(1) of § 1.50A-3) of the WIN employee.

  (g) Ineligible individuals. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered by a WIN employee who—

  (1) Bears any of the relationships described in paragraphs (1) through (8) of section 152(a) of the Code 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 (determined with the application of section 267(c) of the Code),

  (2) If the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the estate or trust, or is an individual who bears any of the relationships described in paragraphs (1) through (8) of section 152(a) of the Code to a grantor, beneficiary, or fiduciary of the estate or trust, or

  (3) Is a dependent (described in section 152(a)(9) of the Code) of the taxpayer, or, if the taxpayer is a corporation, of an individual described in subparagraph (1), or, if the taxpayer is an estate or trust, of a grantor, beneficiary, or fiduciary of the estate or trust.

  (h) WIN employee. For purposes of §§ 1.50A-1 through 1.50B-5 the term “WIN employee” means an employee who is certified by the Secretary of Labor as meeting the requirements of paragraphs (a)(1) (i) and (ii) of this section.

  (i) [Reserved]

  (j) Special rule applicable to transactions to which section 381(a) applies and transactions involving a mere change in form of conducting a trade or business. The first 12 months of employment (whether or not consecutive) and the period described in section 50B (c)(4) of any WIN employee, for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1), shall not be affected by transactions to which the rule contained in paragraph (f) (relating to transaction to which section 381(a) (relating to certain corporate acquisitions) applies), or paragraph (g) (relating to a mere change in form of conducting a trade or business) of § 1.50A-4 applies.

• Treas. Reg. §1.50B-1(a)WIN expenses—(1) In general. Show full text ▾ Collapse ▴

  WIN expenses—(1) In general. Except as otherwise provided in paragraphs (b) through (g) of this section, for purposes of §§ 1.50A-1 through 1.50B-5, the term “work incentive program expenses” (referred to in §§ 1.50A-1 through 1.50B-5 as “WIN expenses”) means the salaries and wages paid or incurred by the taxpayer for services rendered during the first 12 months of employment (whether or not consecutive) by an employee who is certified by the Secretary of Labor as—

• Treas. Reg. §1.50B-1(b)Salaries and wages. Show full text ▾ Collapse ▴

  Salaries and wages. For purposes of this section, the term “salaries and wages” means only cash remuneration including a check. Amounts deducted and withheld from the employee's pay (for example, taxes and contributions to health and retirement plans) shall be deemed to be cash remuneration even though not actually paid directly to the employee.

• Treas. Reg. §1.50B-1(c)Trade or business expenses. Show full text ▾ Collapse ▴

  Trade or business expenses. The term “WIN expenses” includes only salaries and wages which are paid or incurred in a trade or business of the taxpayer and which are deductible in computing taxable income. Thus, salaries and wages paid to domestic employees in a private home are not “WIN expenses”.

• Treas. Reg. §1.50B-1(d)Reimbursed expenses—(1) In general. Show full text ▾ Collapse ▴

  Reimbursed expenses—(1) In general. The term “WIN expenses” does not include salaries and wages to the extent that the taxpayer is reimbursed for such salaries or wages from any source.

  (2) Example. Subparagraph (1) of this paragraph may be illustrated by the following example:

• Treas. Reg. §1.50B-1(e)Geographical limitation—(1) In general. Show full text ▾ Collapse ▴

  Geographical limitation—(1) In general. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered outside the United States (as defined in sections 638 (relating to Continental Shelf areas) and 7701(a)(9). However, services rendered by any WIN employee outside the United States (as defined in sections 638 (relating to Continental Shelf areas) and 7701(a)(9)) shall contribute to such employee's first 12 months of employment (whether or not consecutive) for purposes of paragraph (a) of § 1.50A-3 and paragraph (a) of this section.

  (2) Example. Subparagraph (1) of this paragraph may be illustrated by the following example:

• Treas. Reg. §1.50B-1(f)Maximum period of training or instruction. Show full text ▾ Collapse ▴

  Maximum period of training or instruction. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered by a WIN employee after the end of the 24-month period beginning with the date of initial employment (as defined in paragraph (c)(1) of § 1.50A-3) of the WIN employee.

• Treas. Reg. §1.50B-1(g)Ineligible individuals. Show full text ▾ Collapse ▴

  Ineligible individuals. The term “WIN expenses” does not include salaries and wages paid or incurred for services rendered by a WIN employee who—

  (1) Bears any of the relationships described in paragraphs (1) through (8) of section 152(a) of the Code 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 (determined with the application of section 267(c) of the Code),

  (2) If the taxpayer is an estate or trust, is a grantor, beneficiary, or fiduciary of the estate or trust, or is an individual who bears any of the relationships described in paragraphs (1) through (8) of section 152(a) of the Code to a grantor, beneficiary, or fiduciary of the estate or trust, or

  (3) Is a dependent (described in section 152(a)(9) of the Code) of the taxpayer, or, if the taxpayer is a corporation, of an individual described in subparagraph (1), or, if the taxpayer is an estate or trust, of a grantor, beneficiary, or fiduciary of the estate or trust.

• Treas. Reg. §1.50B-1(h)WIN employee. Show full text ▾ Collapse ▴

  WIN employee. For purposes of §§ 1.50A-1 through 1.50B-5 the term “WIN employee” means an employee who is certified by the Secretary of Labor as meeting the requirements of paragraphs (a)(1) (i) and (ii) of this section.

• Treas. Reg. §1.50B-1(i)§1.50B-1(i) Show full text ▾ Collapse ▴

  [Reserved]

• Treas. Reg. §1.50B-1(j)Special rule applicable to transactions to which section 381(a) applies and transactions involving a mere change in form of conducting a trade or business. Show full text ▾ Collapse ▴

  Special rule applicable to transactions to which section 381(a) applies and transactions involving a mere change in form of conducting a trade or business. The first 12 months of employment (whether or not consecutive) and the period described in section 50B (c)(4) of any WIN employee, for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1), shall not be affected by transactions to which the rule contained in paragraph (f) (relating to transaction to which section 381(a) (relating to certain corporate acquisitions) applies), or paragraph (g) (relating to a mere change in form of conducting a trade or business) of § 1.50A-4 applies.

• Treas. Reg. §1.50B-2Electing small business corporations Show full text ▾ Collapse ▴

  (a) General rule—(1) In general. In the case of an electing small business corporation (as defined in section 1371 (b)), WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall be apportioned pro rata among the persons who are shareholders of such corporation on the last day of such corporation's taxable year, and shall be taken into account for the taxable years of such shareholders within which or with which the taxable year of such corporation ends. The WIN expenses for each employee shall be apportioned separately. In determining who are shareholders of an electing small business corporation on the last day of its taxable year, the rules of paragraph (d)(1) of § 1.1371-1 and of paragraph (a)(2) of § 1.1373-1 shall apply.

  (2) Shareholder as taxpayer. A shareholder to whom WIN expenses are apportioned shall, for purposes of the credit allowed by section 40, be treated as the taxpayer who paid or incurred the expenses allocated to him. If a shareholder takes into account in determining his WIN expenses any WIN expenses with respect to an employee of an electing small business corporation, and if the employment of such employee is terminated in a termination subject to the rules contained in paragraph (a) of § 1.50A-3, or if the electing small business corporation fails to pay comparable wages and such failure is subject to the rules contained in paragraphs (a) (2) and (3) of § 1.50A-3, then such shareholder shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-5.

  (3) Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) of any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the shareholders in such corporation and shall not be affected by a reduction in any shareholder's proportionate stock interest in such corporation (for example, by a sale or redemption or by the issuance of additional shares). Thus, the first 12 months of employment (whether or not consecutive) of any WIN employee shall be the same with respect to any shareholder claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee. Also, such first 12 months of employment and the period described in section 50B(c)(4), with respect to any WIN employee, shall not be deemed to begin again because of the making of a valid election under section 1372.

  (b) Summary statement. An electing small business corporation shall attach to its return a statement showing the apportionment to each shareholder of its WIN expenses with respect to each WIN employee.

  (c) Examples. Paragraph (a) of this section may be illustrated by the following examples:

• Treas. Reg. §1.50B-2(a)General rule—(1) In general. Show full text ▾ Collapse ▴

  General rule—(1) In general. In the case of an electing small business corporation (as defined in section 1371 (b)), WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall be apportioned pro rata among the persons who are shareholders of such corporation on the last day of such corporation's taxable year, and shall be taken into account for the taxable years of such shareholders within which or with which the taxable year of such corporation ends. The WIN expenses for each employee shall be apportioned separately. In determining who are shareholders of an electing small business corporation on the last day of its taxable year, the rules of paragraph (d)(1) of § 1.1371-1 and of paragraph (a)(2) of § 1.1373-1 shall apply.

  (2) Shareholder as taxpayer. A shareholder to whom WIN expenses are apportioned shall, for purposes of the credit allowed by section 40, be treated as the taxpayer who paid or incurred the expenses allocated to him. If a shareholder takes into account in determining his WIN expenses any WIN expenses with respect to an employee of an electing small business corporation, and if the employment of such employee is terminated in a termination subject to the rules contained in paragraph (a) of § 1.50A-3, or if the electing small business corporation fails to pay comparable wages and such failure is subject to the rules contained in paragraphs (a) (2) and (3) of § 1.50A-3, then such shareholder shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-5.

  (3) Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) of any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the shareholders in such corporation and shall not be affected by a reduction in any shareholder's proportionate stock interest in such corporation (for example, by a sale or redemption or by the issuance of additional shares). Thus, the first 12 months of employment (whether or not consecutive) of any WIN employee shall be the same with respect to any shareholder claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee. Also, such first 12 months of employment and the period described in section 50B(c)(4), with respect to any WIN employee, shall not be deemed to begin again because of the making of a valid election under section 1372.

• Treas. Reg. §1.50B-2(b)Summary statement. Show full text ▾ Collapse ▴

  Summary statement. An electing small business corporation shall attach to its return a statement showing the apportionment to each shareholder of its WIN expenses with respect to each WIN employee.

• Treas. Reg. §1.50B-2(c)Examples. Show full text ▾ Collapse ▴

  Examples. Paragraph (a) of this section may be illustrated by the following examples:

• Treas. Reg. §1.50B-3Estates and trusts Show full text ▾ Collapse ▴

  (a) General rule—(1) In general. In the case of an estate or trust, WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall be apportioned among the estate or trust and its beneficiaries on the basis of the income of such estate or trust allocable to each. There shall be apportioned to the estate or trust for its taxable year, and to each beneficiary of such estate or trust for his taxable year in which or with which the taxable year of such estate or trust ends, his share (as determined under paragraph (b) of this section) of the total WIN expenses. The WIN expenses for each employee shall be apportioned separately.

  (2) Beneficiary as taxpayer. A beneficiary to whom WIN expenses are apportioned shall, for purposes of the credit allowed by section 40, be treated as the taxpayer who paid or incurred such WIN expenses allocated to him. If a beneficiary takes into account in determining his WIN expenses any portion of the WIN expenses paid or incurred by an estate or trust and if the employee with respect to which the WIN expenses were paid or incurred is terminated in a termination subject to the rules in paragraph (a) of § 1.50A-3, or if there is a failure (which is subject to the rules is paragraphs (a) (2) and (3) of § 1.50A-3) to pay such employee comparable wages then such beneficiary shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-6.

  (3) Beneficiary. For purposes of this section, the term “beneficiary” includes heir, legatee, and devisee.

  (4) Special rule for termination of interest. If during the taxable year of an estate or trust a beneficiary's interest in the income of such estate or trust terminates, WIN expenses paid or incurred by such estate or trust after such termination shall not be apportioned to such beneficiary.

  (b) Share. A trust's, estate's, or beneficiary's share of the WIN expenses with respect to each employee shall be:

  (1) The total WIN expenses incurred in the taxable year of the estate or trust with respect to such employee, multiplied by

  (2) The amount of income allocable to such estate or trust or to such beneficiary for such taxable year, divided by

  (3) The sum of the amounts of income allocable to such estate or trust and all its beneficiaries taken into account under subparagraph (2) of this paragraph.

  (c) Limitation based on amount of tax. In the case of an estate or trust, the $25,000 amount specified in section 50A(a)(2), relating to limitation based on amount of tax, shall be reduced for the taxable year to—

  (1) $25,000, multiplied by

  (2) The WIN expenses apportioned to such estate or trust under paragraph (a) of this section, divided by

  (3) The WIN expenses apportioned among such estate or trust and its beneficiaries.

  (d) Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) of any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the beneficiaries of an estate or trust and shall not be affected by a reduction or a termination of a beneficiary's interest in the income of such estate or trust. Thus, the first 12 months of employment (whether or not consecutive) of any WIN employee shall be the same with respect to trust or estate, and any beneficiary of such trust or estate claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee.

  (e) Summary statement. An estate or trust shall attach to its return a statement showing the apportionment of WIN expenses with respect to each employee to such estate or trust and to each beneficiary.

  (f) Examples. This section may be illustrated by the following examples:

• Treas. Reg. §1.50B-3(a)General rule—(1) In general. Show full text ▾ Collapse ▴

  General rule—(1) In general. In the case of an estate or trust, WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall be apportioned among the estate or trust and its beneficiaries on the basis of the income of such estate or trust allocable to each. There shall be apportioned to the estate or trust for its taxable year, and to each beneficiary of such estate or trust for his taxable year in which or with which the taxable year of such estate or trust ends, his share (as determined under paragraph (b) of this section) of the total WIN expenses. The WIN expenses for each employee shall be apportioned separately.

  (2) Beneficiary as taxpayer. A beneficiary to whom WIN expenses are apportioned shall, for purposes of the credit allowed by section 40, be treated as the taxpayer who paid or incurred such WIN expenses allocated to him. If a beneficiary takes into account in determining his WIN expenses any portion of the WIN expenses paid or incurred by an estate or trust and if the employee with respect to which the WIN expenses were paid or incurred is terminated in a termination subject to the rules in paragraph (a) of § 1.50A-3, or if there is a failure (which is subject to the rules is paragraphs (a) (2) and (3) of § 1.50A-3) to pay such employee comparable wages then such beneficiary shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-6.

  (3) Beneficiary. For purposes of this section, the term “beneficiary” includes heir, legatee, and devisee.

  (4) Special rule for termination of interest. If during the taxable year of an estate or trust a beneficiary's interest in the income of such estate or trust terminates, WIN expenses paid or incurred by such estate or trust after such termination shall not be apportioned to such beneficiary.

• Treas. Reg. §1.50B-3(b)Share. Show full text ▾ Collapse ▴

  Share. A trust's, estate's, or beneficiary's share of the WIN expenses with respect to each employee shall be:

  (1) The total WIN expenses incurred in the taxable year of the estate or trust with respect to such employee, multiplied by

  (2) The amount of income allocable to such estate or trust or to such beneficiary for such taxable year, divided by

  (3) The sum of the amounts of income allocable to such estate or trust and all its beneficiaries taken into account under subparagraph (2) of this paragraph.

• Treas. Reg. §1.50B-3(c)Limitation based on amount of tax. Show full text ▾ Collapse ▴

  Limitation based on amount of tax. In the case of an estate or trust, the $25,000 amount specified in section 50A(a)(2), relating to limitation based on amount of tax, shall be reduced for the taxable year to—

  (1) $25,000, multiplied by

  (2) The WIN expenses apportioned to such estate or trust under paragraph (a) of this section, divided by

  (3) The WIN expenses apportioned among such estate or trust and its beneficiaries.

• Treas. Reg. §1.50B-3(d)Computation of the first 12 months of employment. Show full text ▾ Collapse ▴

  Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) of any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the beneficiaries of an estate or trust and shall not be affected by a reduction or a termination of a beneficiary's interest in the income of such estate or trust. Thus, the first 12 months of employment (whether or not consecutive) of any WIN employee shall be the same with respect to trust or estate, and any beneficiary of such trust or estate claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee.

• Treas. Reg. §1.50B-3(e)Summary statement. Show full text ▾ Collapse ▴

  Summary statement. An estate or trust shall attach to its return a statement showing the apportionment of WIN expenses with respect to each employee to such estate or trust and to each beneficiary.

• Treas. Reg. §1.50B-3(f)Examples. Show full text ▾ Collapse ▴

  Examples. This section may be illustrated by the following examples:

• Treas. Reg. §1.50B-4Partnerships Show full text ▾ Collapse ▴

  (a) General rule—(1) In general. In the case of a partnership, each partner shall take into account separately, for his taxable year with or within which the partnership taxable year ends, his share (as determined under subparagraph (3) of this paragraph) of the WIN expenses (as defined in paragraph (a) of § 1.50B-1) of employees employed by the partnership during such partnership's taxable year. The WIN expenses for each employee shall be allocated separately.

  (2) Partner as taxpayer. Each partner shall be treated as the taxpayer who paid or incurred the share of the WIN expenses allocated to him. If a partner takes into account in determining his WIN expenses the WIN expenses of an employee of a partnership, and if the employment of such employee is terminated in a termination subject to the rules contained in paragraph (a) of § 1.50A-3, or if the partnership fails to pay comparable wages and such failure is subject to the rules contained in paragraphs (a) (2) and (3) of § 1.50A-3, then such partner shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-7.

  (3) Determination of partner's share. (i) Each partner's share of the WIN expenses shall be determined in accordance with the ratio in which the partners divide the general profits of the partnership (that is, the taxable income of the partnership as described in section 702 (a)(9)) regardless of whether the partnership has a profit or a loss for the taxable year during which the WIN expenses are paid or incurred. However, if the ratio in which the partners divide the general profits of the partnership changes during the taxable year of the partnership, the ratio effective for the date on which the WIN expenses are paid or incurred shall apply.

  (ii) Notwithstanding subdivision (i) of this subparagraph, if the deduction with respect to any WIN expenses is specially allocated and if such special allocation is recognized under section 704 (a) and (b) and paragraph (b) of § 1.704-1, then each partner's share of the WIN expenses shall be determined by reference to such special allocation effective for the date on which the WIN expenses are paid or incurred.

  (4) Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) with respect to any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the partners of such partnership and shall not be affected by a change in the ratio in which the partners divide the general profits of the partnership. Thus, the first 12 months of employment (whether or not consecutive) and the 24-month period described in section 50B(c)(4) of any WIN employee shall be the same with respect to any partner claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee.

  (b) Summary statement. A partnership shall attach to its return a statement showing the allocation to each partner of its WIN expenses with respect to each WIN employee.

  (c) Examples. Paragraph (a) of this section may be illustrated by the following examples:

• Treas. Reg. §1.50B-4(a)General rule—(1) In general. Show full text ▾ Collapse ▴

  General rule—(1) In general. In the case of a partnership, each partner shall take into account separately, for his taxable year with or within which the partnership taxable year ends, his share (as determined under subparagraph (3) of this paragraph) of the WIN expenses (as defined in paragraph (a) of § 1.50B-1) of employees employed by the partnership during such partnership's taxable year. The WIN expenses for each employee shall be allocated separately.

  (2) Partner as taxpayer. Each partner shall be treated as the taxpayer who paid or incurred the share of the WIN expenses allocated to him. If a partner takes into account in determining his WIN expenses the WIN expenses of an employee of a partnership, and if the employment of such employee is terminated in a termination subject to the rules contained in paragraph (a) of § 1.50A-3, or if the partnership fails to pay comparable wages and such failure is subject to the rules contained in paragraphs (a) (2) and (3) of § 1.50A-3, then such partner shall make a recapture determination under the provisions of section 50A (c) and (d) of the Code and § 1.50A-3. See § 1.50A-7.

  (3) Determination of partner's share. (i) Each partner's share of the WIN expenses shall be determined in accordance with the ratio in which the partners divide the general profits of the partnership (that is, the taxable income of the partnership as described in section 702 (a)(9)) regardless of whether the partnership has a profit or a loss for the taxable year during which the WIN expenses are paid or incurred. However, if the ratio in which the partners divide the general profits of the partnership changes during the taxable year of the partnership, the ratio effective for the date on which the WIN expenses are paid or incurred shall apply.

  (ii) Notwithstanding subdivision (i) of this subparagraph, if the deduction with respect to any WIN expenses is specially allocated and if such special allocation is recognized under section 704 (a) and (b) and paragraph (b) of § 1.704-1, then each partner's share of the WIN expenses shall be determined by reference to such special allocation effective for the date on which the WIN expenses are paid or incurred.

  (4) Computation of the first 12 months of employment. The first 12 months of employment (whether or not consecutive) and the period described in section 50B(c)(4) with respect to any WIN employee for purposes of determining the amount of WIN expenses (as defined in paragraph (a) of § 1.50B-1) shall not be affected by a change in the partners of such partnership and shall not be affected by a change in the ratio in which the partners divide the general profits of the partnership. Thus, the first 12 months of employment (whether or not consecutive) and the 24-month period described in section 50B(c)(4) of any WIN employee shall be the same with respect to any partner claiming a credit under section 40 for salaries and wages paid or incurred for services rendered by such employee.

• Treas. Reg. §1.50B-4(b)Summary statement. Show full text ▾ Collapse ▴

  Summary statement. A partnership shall attach to its return a statement showing the allocation to each partner of its WIN expenses with respect to each WIN employee.

No citing cases found in the corpus.