Work Opportunity Tax Credit
The federal government offers tax incentives for businesses to
hire targeted groups of individuals who face barriers to employment.
hire targeted groups of individuals who face barriers to employment.
What is WOTC?
The Work Opportunity Tax Credit or WOTC is a federal hiring incentive available to organizations that hire individuals from certain targeted groups that face significant barriers to employment, including veterans, individuals with disabilities, and long-term welfare recipients. Hiring these individuals can earn you tax credits ranging from $1,200 to $9,600 per qualified hire. This tax credit is dependent upon the new employee qualifying as a member of one of the below target groups and working a minimum of 120 hours in their first year.
Who Qualifies for WOTC?
- Short-Term Temporary Assistance to Needy Families (TANF) Recipients
- Veterans (SNAP Recipients, Disabled, Unemployed)
- Ex-Felons
- Designated Community Residents (residing in an Empowerment Zone)
- Vocational Rehabilitation Referred Individuals
- Summer Youth (residing in an Empowerment Zone) Expires
- Supplemental Nutrition Assistance Program (SNAP) Recipients
- Supplemental Security Income Recipients (SSI)
- Long-term Family Assistance Recipients
- Long-term Unemployment Recipients
What Are The Potential Tax Credits?
| Non-Veteran WOTC Target Groups | Worked at least 120 hours but less than 400 hours | Worked at least 400 hours |
|---|---|---|
| Short-Term TANF Recipient | Up to $1,500 | Up to $2,400 |
| Long-Term TANF Recipient | N/A | Up to $9,000 |
| SNAP (food stamp) Recipient | Up to $1,500 | Up to $2,400 |
| Designated Community Resident | Up to $1,500 | Up to $2,400 |
| Vocational Rehabilitation Referral | Up to $1,500 | Up to $2,400 |
| Ex-Felon | Up to $1,500 | Up to $2,400 |
| SSI Recipient | Up to $1,500 | Up to $2,400 |
| Summer Youth Employee | Up to $750 | Up to $1,200 |
| Veteran Target Group | Worked at least 120 hours but less than 400 hours | Worked at least 400 hours |
|---|---|---|
| Receives SNAP (food stamps) benefits | Up to $1,500 | Up to $2,400 |
| Entitled to compensation for service-connected disability: | ||
| Hired 1 year after leaving service | Up to $3,000 | Up to $4,800 |
| Unemployed at least 6 months | Up to $6,000 | Up to $9,600 |
| Unemployed: | ||
| At least 4 weeks | Up to $1,500 | Up to $2,400 |
| At least 6 months | Up to $3,500 | Up to $5,600 |