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Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a federal tax incentive program that can reduce an employer’s costs by up to $9,600 per new hire. The program is available to employers hiring individuals from specific target groups who face barriers to employment.

For-profit employers hiring individuals in target groups and tax-exempt organizations that hire qualified veterans may benefit from the WOTC. The actual amount of tax credit per employee is based on a percentage of the eligible employee’s wages. There is no limit on the number of eligible employees.

Target Groups

  • Qualified veteran
  • SNAP (food stamp) recipient
  • Temporary Assistance to Needy Families
  • Designated community resident
  • Summer youth
  • Vocational rehabilitation referral
  • Ex-felon
  • Supplemental Security Income (SSI) recipient
  • Long-Term Unemployed

Process to Claim Tax Credit

GBQ provides the following services to yield maximum benefits while making minimal demands on employers:

  • Pre-screen employees – Employees complete IRS Form 8850 and a supplemental questionnaire to determine WOTC eligibility.
  • Certify eligible employees – Submit required forms to the respective DLA and provide additional documentation, as necessary, to expedite the issuance of certifications.
  • Credit calculation – The tax credit is equal to 25% of wages after 120 hours worked or 40% of wages after 400 hours up to the maximum amount allowed based on the employees’ target group.
  • Claim the tax credit – Taxable businesses apply the credit against business income tax liability on their federal tax return. The credit has a carry-back of one year and carry-forward of 20 years.

 

Contact
  • Marti Brenner
  • Director, Credit and Incentive Services
  • (614) 947-5287
  • mbrenner@gbq.com
Contact