Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit (WOTC) is a federal tax credit that rewards employers for hiring new employees from various "targeted groups." The tax credit differs based on which group your employee is in. The tax credit has maximum amounts of up to $2,400, $4,800 or $9,000 per qualified employee.
The targeted groups currently available for screening your employees are:
- Hurricane Katrina Residents (for hires before August 28, 2009)
- A member of a family that is a Qualified Food Stamp Recipient
- A member of a family that is a Qualified Aid to Families with Dependent Children (AFDC) Recipient
- Qualified Veterans
- Qualified Ex-Felons, pardoned, paroled or work release individuals
- Vocational Rehabilitation Referrals
- Qualified Summer Youths
- Qualified Supplemental Security Income (SSI) Recipients
- Qualified Individuals living within an Empowerment Zone, or Renewal Community
- Resident of one of 408 designated Rural Renewal Counties
- Long Term Family Assistance Recipient (TANF)
- Disconnected Youth (NEW GROUP FOR 2009)
- Unemployed Veterans (NEW GROUP FOR 2009)
Employers must screen for these qualified employees at the point of hire. Failure to have a proper implementation method and compliance assurance will drastically affect the amount of tax credits that will be available to your company. We ensure that an efficient solution will be provided without burdening your existing human resources staff.
Tax Credit Services will screen your applicants, process the certification paperwork, calculate the federal credits and then produce tax forms and reports for your company.
For a listing of all of the Rural Renewal Counties, Click here.
WOTC Legislation Notes:
WOTC was extended through 2011 by the Emergency Economic Stabilization Act of 2008 (a.k.a. The Bailout Bill) which was signed into law in October of 2008.
"Disconnected Youth" and "Unemployed Veterans" were added as groups by the American Recovery and Reinvestment Act of 2009 which was signed by President Obama in February 2009.