Above the Clouds

Hiring

Credits (WOTC)

What Is the WOTC?

 

The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire and retain individuals from target groups with significant employment barriers (e.g., veterans, ex-felons, etc.). Employers can claim about $9,600 per employee in tax credits per year under the WOTC program. Additionally, there is no set limit to the number of individuals an employer can hire in order to claim the tax credit.

How Does It Work?

 The tax credit employers can claim is dependent on a few factors:

  • The specific target group of the individual hired

  • The wages paid to that individual during his or her first year of employment

  • The number of hours the individual has worked in first year of employment

 

Who Can I Hire?

Employers can hire from the following target groups:

  • Veterans

  • TANF recipients

  • SNAP (food stamp) recipients

  • Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)

  • Vocational Rehabilitation Referrals

  • Ex-felons

  • Supplemental Security Income Recipients

  • Summer Youth Employees (living in Empowerment Zones)

Given all of the benefits the WOTC program provides for both employers and employees, it’s a program you should consider with your next hire.