What is WOTC and how does it work?

WOTC is the Federal Work Opportunity Tax Credit program

This program has been around in various forms since the mid-90’s.  It is designed to motivate or incentivize employers to hire people of various target groups.

What are some of the groups?  Many:

  • Veterans qualify
  • Food Stamp recipients
  • People on TANF (Temporary Assistance to Needy Families)
  • Zone Residents
  • Long Term Unemployed, etc.

How much are the tax credits for hiring a qualified individual?   Credits range from $1,200 to over $9,000 each.

What do I have to do to take advantage of this program?  There are several important and time sensitive steps that must be followed in order to capture (and maximize) credits:

  1. Screen all job applicants on or before day of job offer
  2. Submit applications to the State Workforce Agency (SWA) according to their prescribed format
  3. Track / await a certification (or denial) from the SWA
  4. Calculate tax credit value using qualified employee wages and hours
  5. Apply tax credit to Federal tax filing

Where can I go to learn more about this program on my own?  https://www.doleta.gov/business/incentives/opptax/

What if I don’t want to manage all of this and would like help?  Please go to our Contact Us page or Chat with us.  We are eager to assist.