How is the number of FTEs determined for purposes of the credit?
A. The number of an employer’s FTEs is determined by dividing (1) the total hours for which the employer pays wages to employees during the year (but not more than 2,080 hours for any employee) by (2) 2,080. The result, if not a whole number, is then rounded to the next lowest whole number. See Q/A-12 through 14 for information on which employees are not counted for purposes of determining FTEs. Example. For the 2010 tax year, an employer pays 5 employees wages for 2,080 hours each, 3 employees wages for 1,040 hours each, and 1 employee wages for 2,300 hours. The employer’s FTEs would be calculated as follows: (1) Total hours not exceeding 2,080 per employee is the sum of: a. 10,400 hours for the 5 employees paid for 2,080 hours each (5 x 2,080) b. 3,120 hours for the 3 employees paid for 1,040 hours each (3 x 1,040) c.
