Work Opportunity Tax Credit (WOTC)

The WOTC promotes the hiring of individuals who qualify as members of target groups, by providing a federal tax credit incentive of up to $9,600 for employers who hire them.

The American Taxpayer Relief Act of 2012 (P.L. 112-240) extends the WOTC to December 31, 2013. The WOTC has two purposes:

  • To promote the hiring of individuals who qualify as a member of a target group.
  • To provide a federal tax credit to employers who hire these individuals.

Benefits of the WOTC

An employer may qualify for a tax credit of up to $9,600 if the employee is a member of a designated target group and meets that group’s specific requirements.

Target Groups That Qualify for the WOTC

Individuals hired from the following nine target groups may qualify an employer for the WOTC:

  1. Qualified recipients of Temporary Assistance to Needy Families (TANF).
  2. Qualified veterans receiving Food Stamps or qualified veterans with a service connected disability who:
    • Have a hiring date which is not more than one year after having been discharged or released from active duty OR
    • Have aggregate periods of unemployment during the one year period ending on the hiring date that equal or exceed six months.
  3. Ex-felons hired no later than one year after conviction or release from prison.
  4. Designated Community Resident – an individual who has attained ages 18 but not 40 on the hiring date who reside in an Empowerment Zone, Renewal Community, or Rural Renewal County.

  1. Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network.
  2. Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Community.
  3. Qualified Food Stamp recipients ages 18 but not 40 on the hiring date.
  4. Qualified recipients of Supplemental Security Income (SSI).
  5. Long-term family assistance recipients.

Take advantage of an insider’s tax expertise

CFG Consulting, Inc. handles all the administrative details of the WOTC program on your behalf. We conduct face-to-face interviews or telephone screenings with all potential WOTC applicants. Clear written procedures guide your managers throughout the hiring process. Our staff trains your personnel to properly evaluate potential WOTC applicants’ qualifications. Our turn-key approach includes on-going consultation and support to keep you up to date with any changes in WOTC regulations and qualifications

Let us do the work.

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