Work Opportunity Tax Credit (WOTC) is a federally-funded tax credit program designed to provide incentive for employers to hire individuals with barriers to employment.
The program provides to “for-profit” entities a 40% tax credit against first-year qualifying wages paid when employed 400 hours or more. It reduces to 25% for those employed less than 400, but at least 120 hours.
Qualified tax-exempt “not for-profit” 501(c) entities can participate when hiring qualifying Veterans only. The credit is 26% of the first-year wages when employed 400 hours or more. It reduces to 16.25% for those employed less than 400 hours, but at least 120 hours.
Except where noted, the maximum credit is $2,400.
Employer-Friendly Benefits for Hiring Job Seekers Most in Need of Employment such as:
A Supplemental Nutrition Assistance Program (SNAP) recipient age 18-39 years who is a member of a family that received SNAP benefits (food stamps) for:
- The 6-month period ending on the hiring date; OR
- At least 3 of the 5 months ending on the hiring date, in the case of a family member who ceased to be eligible for such assistance under Section 6(o) of the Food Stamp Act of 1977.
A long-term family assistance recipient is an individual who has been certified by your State Employment Security Agent (SESA) as a member of a family that:
- Has received Temporary Assistance for Needy Families (TANF) assistance payments program, for at least 18 consecutive months ending on the hiring date;
- Receives TANF assistance payments from TANF for any 18 months (whether or not consecutive) beginning after August 5, 1997, and is hired not more than two years after the end of the earliest 18-month period; or
- Stops being eligible after August 5, 1997, for assistance payments because federal or state law limits the maximum period that assistance is payable, and is hired not more than 2 years after that eligibility for assistance ends.
Year one maximum credit: $4,000 Year two maximum credit: $5,000
If you would like more information about tax credits, please complete this form.