The Work Opportunity Tax Credit (WOTC) is a federal tax credit that offers a financial incentive to employers and plays a pivotal role in promoting a stable workforce.
WOTC at work
When you invest in individuals from specific groups — such as the long-term unemployed, SNAP recipients, or designated community residents — you can reduce your federal tax liability by up to $9,600 per eligible employee.
Taking advantage of tax credits like WOTC can be a full-time job. Watch our short WOTC video to see how CLA can help you identify eligible employees, collect supporting information, submit the required tax forms, and compute the dollar amount of the credit.
Claiming the Work Opportunity Tax Credit
- Long-term unemployment recipients (27 consecutive weeks or more)
- Short-term Temporary Assistance for Needy Families (TANF)
- Qualified veteran (discharged from active duty within one year of hire date)
- Disabled veteran
- Unemployed disabled veteran
- Unemployed veteran (four weeks)
- Unemployed veteran (six months)
- Qualified ex-felon
- Designated resident of a Rural Renewal County or Empowerment Zone (EZ)
- Vocational rehabilitation referral
- Food stamp recipient (Supplemental Nutrition Assistant Program or SNAP)
- Supplemental Security Income (SSI) recipient
- Long-term family assistance recipient
- Summer youth employee
- Temporary, seasonal, part-time, and full-time workers who put in a minimum of 120 hours in their first 12 months of employment
- New employees who have not worked for the hiring employer at any other time
- Any job type is acceptable
- For-profit businesses of any size qualify
- Tax-exempt organizations qualify for the veteran target groups only, and can get a refund of payments made on Form 941
Other tax credits and incentives
CLA’s business consulting services can help you leverage federal, state, and local credits and incentives like WOTC to help potentially lower your tax burden and enhance the return on your capital expenditures. Get more information on these tax credits and incentives today.