1 2 3 4 5 6 7 8 9 10 5 paragraph shall not apply if the spouse of the taxpayer has no paid qualified wages for, and has no unused credit carryback or carryover to, the taxable year of such spouse which ends within or with the taxpayer's taxable year. "(5) AFFILIATED GROUPS.—In the case of an affiliated group, the $25,000 amount specified under subparagraphs (A) and (B) of paragraph (2) shall be reduced for each member of the group by apportioning $25,000 among the members of such group in such 11 manner as the Secretary or his delegate shall by regu 121 13 14 15 16 17 lations prescribe. For purposes of the preceding sentence, the term 'affiliated group' has the meaning assigned to such term by section 1504 (a), except that all corporations shall be treated as includible corporations (without any exclusion under section 1504 (b)). "(b) CARRYBACK AND CARRYOVER OF UNUSED 18 CREDIT. 19 20 21 22 23 "(1) ALLOWANCE OF CREDIT.-If the amount of the credit determined under subsection (a) (1) for any taxable year exceeds the limitation provided by subsec tion (a) (2) for such taxable year (hereinafter in this subsection referred to as 'unused credit year'), such ex 6 "(A) a disadvantaged employee wage credit carryback to each of the 3 taxable years preceding the unused credit year, and "(B) a disadvantaged employee wage credit carryover to each of the 7 taxable years following the unused credit year, and shall be added to the amount allowable as a credit by section 40 for such years, except that such excess may 1968. The entire amount of the unused credit for an un- 10 taxable years to which (by reason of subparagraphs such unused credit may not be added for a prior taxable "(2) LIMITATION.-The amount of the unused tion (a) (2) for such taxable year exceeds the sum of "(A) the credit allowable under subsection (a) (1) for such taxable year, and 1 2 3 4 7 "(B) the amounts which, by reason of this subsection, are added to the amount allowable for such taxable year and attributable to the taxable years preceding the unused credit year. 5 "SEC. 52. DEFINITIONS; SPECIAL RULES. 6 7 8 9 10 "(a) DISADVANTAGED EMPLOYEE. "(1) IN GENERAL.-For purposes of this subpart, the term 'disadvantaged employee' means an individual certified by the Secretary of Labor (or by an agency or organization designated by him), prior to his employ11 ment by the taxpayer, as an unemployed or underemployed individual who meets the requirements and condi 122 tions prescribed by the Secretary of Labor under paragraph (2), except that such term does not include any individual receiving training from the taxpayer under a federally assisted on-the-job training program, including any such program under the Manpower Development and Training Act of 1962 or the Economic Opportunity Act of 1964. "(2) REQUIREMENTS AND CONDITIONS.-The Sec retary of Labor shall prescribe the requirements and conditions which must be met by an unemployed or underemployed individual to be eligible for certification for purposes of paragraph (1). "(3) RULES AND REGULATIONS.-The Secretary 8 1 2 3 4 5 6 7 of Labor is authorized to prescribe such rules and regu lations as may be necessary to carry out his functions and duties under paragraphs (1) and (2). In perform ing his functions and duties under this subsection, the Secretary of Labor shall consult with the Board of Directors of the Economic Opportunity Corporation. "(b) QUALIFIED WAGES.-For purposes of this sub8 part, the term 'qualified wages' means the compensation paid 9 to an employee for personal services rendered by him, and the 10 cost of benefits accruing to an employee and paid or incurred 11 by an employer by reason of the employment relationship, 12 but only if the rate of compensation paid to such employee 13 for personal services rendered by him equals or exceeds 14 whichever of the following is the highest: 22 28 23 “(1) the minimum wage which would be applicable under the Fair Labor Standards Act of 1938 if section 6 of such Act applied to the employee and he was not exempt under section 13 thereof, "(2) the minimum wage, if any, prescribed by State or local law for the most nearly comparable cov ered employment, or "(3) the prevailing rate of wages in the area for the same or similar personal services. 24 Upon request of the Secretary or his delegate, the Secretary 25 of Labor shall determine whether the compensation paid to 9 1 any employee for personal services meets the requirement of 2 the preceding sentence. 3 "(c) LIMITATION ON NUMBER OF DISADVANTAGED 4 EMPLOYEES.-For purposes of this subpart, the number of 5 disadvantaged employees of any employer which may be 6 taken into account for any pay period shall not exceed― "(1) in the case of an employer of 10 or less employees, 50 percent of the total number of employees, "(2) in the case of an employer of more than 10 but less than 101 employees, 25 percent of the total number of employees, and 7 8 9 10 11 "(3) in the case of an employer of 101 or more employees, 15 percent of the total number of employees. "(d) EARLY TERMINATION OF EMPLOYMENT.-For purposes of this subpart, the qualified wages paid to, or with respect to, a disadvantaged employee "(1) during the first six months of his employment shall not be taken into account if he ceases to be an employee of the taxpayer before the end of such sixmonth period, "(2) during the second six months of his employment, if he ceases to be an employce of the taxpayer before the end of such six-month period, and "(3) during the second year of his employment, if |