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The Work Opportunity Tax Credit (WOTC) provides businesses with an incentive to hire individuals from groups that have particularly high unemployment rates or other special employment needs. These credits can be up to $2,400 against Federal Taxes. Businesses do not have to be located in an Empowerment Zone (EZ), Enterprise Community (EC), or Renewal Community (RC) to qualify for this credit. They can claim the credit if they pay or incur qualified first-year wages to a targeted-group employee who began work after September 1996. This expires for individuals who begin work after December 31, 2003. It cannot be combined with WtW credit and a State Employment Service Agency must certify employee is in targeted group.
Groups that qualify include:
-High-risk youth (ages 18 to 24 who live in an EZ, EC, or RC).
-Veterans.
-Ex-felons.
-Vocational rehabilitation referrals.
-Summer youth employees (ages 16 and 17) who live in an EZ, EC, or RC.
-Food stamp recipients.
-Recipients of assistance under Aid to Families with Dependent Children (AFDC)
or its successor program, Temporary Assistance for Needy Families (TANF).
-Supplemental security income (SSI) recipients.
(please refer to IRS Forms 5884 & 8850).
HUD WorkPad--WOTC
PowerPoint Presentation
Additional FAQ |
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