What is WOTC?
WOTC is a Federal tax credit created by the Small Business Job Protection Act of 1996 and the Welfare-to-Work Tax Credit of 1996. This credit is available to employers who hire and retain from target groups. Employers claim about $1 billion in tax credits each year under the WOTC program. There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit, and there are a few simple steps to follow to apply for WOTC.
What Types of Employees Qualify?
- TANF Recipients
- SNAP (Food Stamp) Recipients
- Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
- Vocational Rehabilitation Referral
- Supplemental Security Income Recipients
- Summer Youth Employee (living in Empowerment Zones)
What About Everyone Else?
Candidates not qualified under the above program virtually always qualify under our Additional Employer Credits - Click Here.
How are the Tax Credits Calculated?
Employers generally can earn a tax credit equal to 25% or 40% of a new employee's first-year wages, up to the maximum for the target group to which the employee belongs. Employers will earn 25% if the employee works at least 120 hours and 40% if the employee works at least 400 hours. The average benefit per employee is $2,400.00.
Do My Employees Qualify for WOTC?
The only way to know is by processing a new candidate or employee.