Tax Tip #180

The Work Opportunity Tax Credit (WOTC) is available for employers with new hires. This credit aims to assist targeted groups who have consistently faced significant barriers to employment. 

Groups include:

• Qualified IV-A recipients
• Qualified veterans
• Qualified ex-felons
• Designated community residents
• Vocational rehabilitation referral
• Summer youth employee
• Qualified Supplemental Nutrition Assistance Program recipients
• Supplemental Security Income recipients
• Long-Term Family Assistance recipients
• Qualified Long-Term Unemployment recipients (unemployed for no less than 27 consecutive weeks)

Benefits include:

• If the employee works for at least 120 hours but less than 400 hours during the first year of employment the employer is eligible to receive a credit equal to 25% of the employee’s qualified wages up to a maximum credit of $6,000.
  
• If the employee works for at least 400 hours during the first year of employment the employer is eligible to receive a credit equal to 40% of the employee’s qualified wages up to a maximum credit of $6,000.

Employers who hire from any of the targeted groups, must obtain certification from the state agency within 28 days of employment which will ensure eligibility and ultimate success of the WOTC.

This credit is currently set to expire on December 31, 2025.