Work Opportunity Tax Credit (WOTC)
Have you considered pursuing the Work Opportunity Tax Credit, or “WOTC” for your organization, but the process felt too overwhelming? Unsure what WOTC is and want to know more?
WOTC promotes the hiring of individuals who qualify as members of target groups, by providing a federal tax credit incentive of up to $9,600 for employers who hire them.The WOTC has two purposes:
- To promote the hiring of individuals who qualify as a member of a target group
- To provide a federal tax credit to employers who hire these individuals.
What are the target groups? The target groups consist of :
- Qualified recipients of Temporary Assistance to Needy Families (TANF).
- Qualified veterans receiving Food Stamps or qualified veterans with a service connected disability who:
- Have a hiring date which is not more than one year after having been discharged or released from active duty OR
- Have aggregate periods of unemployment during the one year period ending on the hiring date that equal or exceed six months.
- Ex-felons hired no later than one year after conviction or release from prison.
- Designated Community Resident – an individual who has attained ages 18 but not 40 on the hiring date who reside in an Empowerment Zone, Renewal Community, or Rural Renewal County.
- Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network.
- Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Community.
- Qualified Food Stamp recipients ages 18 but not 40 on the hiring date.
- Qualified recipients of Supplemental Security Income (SSI).
- Long-term family assistance recipients.
There are other questions to consider, such as:
- What else do I need to know about target groups?
- How do you determine eligibility
- What is the amount of the credit available through WOTC?
- For which tax years can the credit be applied?
- How long must the individual remain on the job to provide the employer with a tax credit?
- How can you request certification?
- What is the timeframe for forms submission?
- What is the process for applying for WOTC?
- Who do you go to if you have questions?
What if there was someone who could do all the work for you?
- Identify eligible employees
- Understand and translate all the Federal and State guidelines for your company to obtain the eligible tax credits
- Handles all the administrative duties necessary to obtain WOTC in your state(s)
- Protects your organization from asking the sensitive questions necessary to obtain the WOTC tax credits
Navigating any federal program can be challenging, but with WOTC we can help. Ask us how.