The Work Opportunity Tax Credit (WOTC) is a federal income tax credit available to employers that hire individuals from targeted groups that have traditionally faced barriers to employment. Congress has recently expanded this program by introducing new target groups and increasing the amount of the credit. The following target groups are eligible for the WOTC program:
The WOTC benefit claimed by an employer is determined by the hours worked and the employee’s WOTC target group. It is a federal income tax credit applied against a taxpayer’s income tax liability. New employees must be retained a minimum of 120 hours and may generate up to $9,600 in credits.
Claiming WOTC presents unique challenges as new hires must sign the required forms on the date they are offered employment. Those forms must then be submitted within 28 days of date of hire in order to obtain certification. Our applicant-screening process includes the following to maximize compliance and qualification: