- You must have lost your job because the place where you worked either permanently closed or moved, or because your employer abolished your job or shift. (Note: Abolishment of job or shift doesn't include layoffs resulting from seasonal employment, temporary plant closings for retooling, etc.)
- During the 12-month period beginning when you lost your job, you must have paid for displaced worker training.
- While you were receiving displaced worker training you must have been either unemployed or working no more than 20 hours a week.
If you meet the above criteria, then your displaced worker training credit is one-half of your job training expenses paid during the year, but can't exceed $500. Don't include any amount that was reimbursed. Also, do NOT include amounts you paid for computer purchases or upgrades, professional organizational fees, meals, mileage, transportation or outplacement firms that help you to develop skills used to find a new job - for example, career planning, profile analysis, skills assessment, resume writing, marketing action plan etc. that you pay for in your endeavor to find a new job. These training classes are not to improve the skills that you'd use to perform the functions or tasks associated with a new job.
So if you paid $1,500 for your qualified displaced worker training, then one-half of your displaced worker training expenses is $750, which is more than $500, so your displaced worker training credit is $500. Also, if you took the displaced worker training credit on last year's tax return, you can't have more than $500 in displaced worker training credit between the two years. For example, if you took a $300 job training credit on last year's tax return then, the most you can get this year is $200 (assuming your expenses were $400 or more this year).
If your filing status is Married Filing Jointly, each spouse can take a credit for up to $500 for displaced worker training (for a total of up to $1,000), subject to the requirements listed above.