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Program overview

WOTC defined

The work opportunity tax credit (WOTC) program is a federal government initiative designed to increase employment opportunities for people who typically experience certain barriers to employment, such as veterans, public assistance recipients, or ex-felons.

How much businesses can save

The credit amount for WOTC can be up to $9,600 for each qualified new hire, depending upon the new hires' WOTC target group. The credit is equal to a percentage of the eligible employee’s wages, and the employee must work at least 120 hours for the employer to receive credit.

WOTC target groups

The new employee must belong to one of the following WOTC target groups:

Veterans with a service-connected disability who have been unemployed for at least 6 months in the past year $9,600
Veterans with a service-connected disability and hired within 1 year of their discharge/release date $4,800
Veterans who have been unemployed for at least 6 months $5,600
Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits $2,400
Veterans who have been unemployed for at least 4 weeks but less than 6 months  $2,400
Long-term unemployed $2,400
SNAP recipients $2,400
Temporary Assistance for Needy Families (TANF) recipients $2,400
Long-Term Family Assistance recipients who are members of a family that has received TANF benefits for at least 18 consecutive months $9,000
Supplemental Security Income recipients $2,400
Vocational rehabilitation referrals $2,400
Ex-felons $2,400
Designated community residents $2,400
Summer Youth program participants who are 16 to 17 years old, work between May 1 and September 15, and live in a designated community area $1,200

When to claim the credit

  • Employers claim the tax credit against federal taxable income for the year that they “realize” the credit, that is, the year that the credit was awarded, not the year that the employee was hired.
  • WOTC is non-refundable, meaning the business must have a tax liability against which to use the credit.
  • Unused credit can be carried back one year and carried forward for 20 years.

How to claim the credit

  • Employee must complete IRS Form 8850 on or before starting the job.
  • Form 8850 must be postmarked within 28 days of start date and sent to the state Department of Labor for certification.
When we went through our first year with CTI we had an 89% completion rate, to me that’s unheard of...their team is dedicated to working with us and they are trying to maximize your tax credits.
Jay Ramos, President of Amtec

Elevate Your Tax Savings with WOTC

Learn how your business can save on income tax liability by hiring individuals who often experience employment roadblocks.

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