fied 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 $6,000 OF WAGES PER YEAR TAKEN INTO ACCOUNT. The amount of the qualified first-year wages, and the amount of the qualified second-year wages, which may be taken into account with respect to any individual shall not exceed $6,000 per year.

[Sec. 51(c)]

(c) WAGES DEFINED. For purposes of this subpart

(1) IN GENERAL.-Except as otherwise provided in this subsection, subsection (d) (8) (D), 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 contained in such section).

(2) 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 payments for onthe-job training of such individual for such period.

(3) TERMINATION.-The term "wages" shall not include any amount paid or incurred to an individual who begins work for the employer after December 31, 1984.

[Sec. 51(d)]

(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 vocational rehabilitation referral,

(B) an economically disadvantaged youth,

(C)an economically disadvantaged Vietnam-era veteran, (D) an SSI recipient,

(E) a general assistance recipient,

(F) a youth participating in a cooperative education

program,

(G) an economically disadvantaged ex-convict,

(H) an eligible work incentive employee,

(I) an involuntarily terminated CETA employee, or

(J) a qualified summer youth employee.

(2) VOCATIONAL REHABILITATION REFERRAL.-The term "vocation rehabilitation referral" 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 results in a substantial handicap to employment, and

(B) having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to

(i) an individualized written rehabilitation plan under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, or

(ii) a program of vocational rehabilitation carried out. under chapter 31 of title 38, United States Code.

(3) ECONOMICALLY DISADVANTAGED YOUTH.—

(A) IN GENERAL.-The term "economically disadvantaged youth" means any individual who is certified by the designated local agency as

(i) meeting the age requirements of subparagraph (B), and

(ii) being a member of an economically disadvantaged family (as determined under paragraph (11)).

(B) AGE REQUIREMENTS.-An individual meets the age requirements of this subparagraph if such individual has attained age 18 but not 25 on the hiring date.

(4) VIETNAM VETERAN WHO IS A MEMBER OF AN ECONOMICALLY DISADVANTAGED FAMILY.-The term "Vietnam veteran who is a member of an economically disadvantaged family" means any individual who is certified by the designated local agency as

(A) (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, any part of which occurred after August 4, 1964, and before May 8, 1975, or

(ii) having been discharged or released from active duty. in the Armed Forces of the United States for a service-connected disability if any part of such active duty was performed after August 4, 1964, and before May 8, 1975,

(B) not having any day during the preemployment period which was a day of extended active duty in the Armed Forces of the United States, and

(C) being a member of an economically disadvantaged family (determined under paragraph (11)).

For purposes of subparagraph (B), the term "extended active duty" means a period of more than 90 days during which the individual was on active duty (other than active duty for training).

(5) SSI RECIPIENTS.--The term "SSI recipient" means any individual who is certified by the designated local agency as receiving supplemental security income benefits under title XVI of the Social Security Act (including supplemental 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 in the preemployment period.

(6) GENERAL ASSISTANCE RECIPIENTS.—

(A) IN GENERAL.-The term "general assistance recipient" means any individual who is certified by the designated local agency as receiving assistance under a qualified general assistance program for any period of not less than 30 days ending within the preemployment period.

(B) QUALIFIED GENERAL ASSISTANCE PROGRAM.-The term "qualified general assistance program" means any program of a State or a political subdivision of a State

(i) which provides general assistance or similar assistance which

(I) is based on need, and

(II) consists of money payments or voucher or scrip, and

(ii) which is designated by the Secretary (after consultation with the Secretary of Health, Education, and

Welfare) as meeting the requirements of clause (i). (7) ECONOMICALLY DISADVANTAGED EX-CONVICT. The term "economically disadvantaged ex-convict" means any individual 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,

(B) as being a member of an economically disadvantaged family (as determined under paragraph (11)), and

(C) as having a hiring date which is not more than 5 years after the last date on which such individual was so convicted or was released from prison.

(8) YOUTH PARTICIPATING IN A QUALIFIED COOPERATIVE EDUCA

TION PROGRAM.

(A) IN GENERAL.-The term "youth participating in a qualified cooperative education program" means any individual who is certified by the school participating in the program as

(i) having attained age 16 and not having attained age 20,

(ii) not having graduated from a high school or vocational school,

(iii) being enrolled in and actively pursuing a qualified cooperative education program, and

who

(iv) being a member of an economically disadvantaged family (as determined under paragraph (11)). (B) QUALIFIED COOPERATIVE EDUCATION PROGRAM DEFINED.The term "qualified cooperative education program" means a program of vocational education for individuals (through written cooperative arrangements between a qualified school and 1 or more employers) receive instruction (including required academic instruction) by alternation of study and school with a job in any occupational field (but only if these 2 experiences are planned by the school and employer so that each contributes to the student's education and employability).

(C) QUALIFIED SCHOOL DEFINED.-The term "qualified school" means

(i) a specialized high school used exclusively or principally for the provision of vocational education to individuals who are available for study in preparation for entering the labor market,

(ii) the department of a high school exclusively or principally used for providing vocational education to persons who are available for study in preparation for entering the labor market, or

(iii) a technical or vocational school used exclusively or principally for the provision of vocational education to persons who have completed or left high school and

who are available for study in preparation for entering the labor market.

A school which is not a public school shall be treated as a qualified school only if it is exempt from tax under section 501(a).

(1) WAGES.-In the case of remuneration attributable to services performed while the individual meets the requirements of clauses (i), (ii), and (iii) of subparagraph (A), wages and unemployment insurance wages, shall be determined without regard to section 3306 (c) (10) (C).

(9) ELIGIBLE WORK INCENTIVE EMPLOYEES.-The term "eligible work incentive employee" means an individual who has been certified by the designated local agency as

(A) being eligible for financial 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 immediately precedes the date on which such individual is hired by the employer, or

(B) having been placed in employment under a work incentive program established under section 432 (b) (1) or 445 of the Social Security Act.

(10) INVOLUNTARILY TERMINATED CETA EMPLOYEE.-The term "involuntarily terminated CETA employee" means an individual who is certified by the designated local agency as having been involuntarily terminated after December 31, 1980, from employment financed in whole or in part under a program under part D of title II or title VI of the Comprehensive Employment and Training Act. This paragraph shall not apply to any individual who begins work for the employer after December 31, 1982.

(11) MEMBERS OF ECONOMICALLY DISADVANTAGED FAMILIES.-An individual is a member of an economically disadvantaged family if the designated local agency determines that such individual was a member of a family which had an income during the 6 months immediately preceding the earlier of the month in which such determination occurs or the month in which the hiring date occurs, which, on an annual basis, would be 70 percent or less of the Bureau of Labor Statistics lower living standard. Any such determination shall be valid for the 45-day period beginning on the date such determination is made.

(12) QUALIFIED SUMMER YOUTH EMPLOYEE.

(A) IN GENERAL.-The term "qualified summer youth employee" means an individual—

(i) who performs services for the employer 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 (as defined in paragraph (14)),

(iii) who has not been an employee of the employer during any period prior to the 90-day period described in subparagraph (B) (iii), and

(iv) who is certified by the designated local agency as being a member of an economically disadvantaged family (as determined under paragraph (11)).

(B) SPECIAL RULES FOR DETERMINING AMOUNT OF CREDIT. For purposes of applying this subpart to wages paid or incurred to any qualified summer youth employee

(i) subsection (a) (1) shall be applied by substituting "85 percent" for "50 percent",

(ii) subsections (a) (2) and (b) (3) shall not apply, (iii) 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 individual begins work for the employer", and

(iv) subsection (b) (4) shall be applied by substituting "$3,000" for "$6,000".

(C) SPECIAL RULE FOR CONTINUED EMPLOYMENT FOR SAME EMPLOYER. In the case of an individual who, with respect to the same employer, is certified as a member of another targeted group after such individual has been a qualified summer youth employee, paragraph (14) shall be applied by substituting "certified" for "hired by the employer".

(13) PREEMPLOYMENT PERIOD.-The term "preemployment period" means the 60-day period ending on the hiring date.

(14) HIRING DATE.-The term "hiring date" means the day the individual is hired by the employer.

(15) 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).

(16) SPECIAL RULES FOR CERTIFICATIONS.

(A) IN GENERAL.—An individual shall not be treated as a member of a targeted group unless, on or before the day on which such individual begins work for the employer, the employer

(i) has received a certification from a designated local agency that such individual is a member of a targeted group, or

(ii) has requested in writing such certification from the designated local agency.

(B) INCORRECT CERTIFICATIONS.-If—

(i) an individual has been certified as a member of a targeted group, and

(ii) such certification is incorrect because 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 employer shall not be treated as qualified wages.

[Sec. 51(e)-Repealed.]

[Sec. 51(f)]

(f) REMUNERATION MUST BE FOR TRADE OR BUSINESS EMPLOY

MENT.

(1) IN GENERAL.-For purposes of this subpart, remuneration paid by an employer to an employee during any taxable year shall