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Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire veterans and individuals from other eligible target groups with significant barriers to employment. Each year, employers claim over $1 billion in tax credits under the WOTC program. The success and growth of this income tax credit for business is beneficial for all who participate, while increasing America’s economic growth and productivity.

A new hire qualifies for a veterans target group, if the individual is:

  • A veteran who is a member of a family that received SNAP benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date;

OR

  • A disabled veteran entitled to compensation for a service-connected disability, who has been:
  • Hired within 1 year of discharge or release from active duty, OR
  • Unemployed for at least 6 months in the year ending on the hiring date;

OR

  •  A veteran who has been unemployed for:
  •  At least 4 weeks in the year ending on the hiring date; OR
  •  At least 6 months in the year ending on the hiring date.

Please note that to have veteran's status to be eligible for WOTC, an individual must:

  • Have served on active duty (not including training) in the U.S. Armed Forces for more than 180 days, OR have been discharged or released from active duty for a service-connected disability; AND
  • Not have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date.

 

HOW TO APPLY

INFORMATION AND RESOURCES

1. Complete IRS Form 8850 by the day the job offer is made.

2. Complete ETA Form 9061, or complete ETA Form 9062 if the employee has been

conditionally certified as belonging to a WOTC target group by a State Workforce Agency,

Vocational Rehabilitation agency, or another participating agency.

3. Submit the completed and signed IRS and ETA forms to your State Workforce Agency. Forms

must be submitted within 28 calendar days of the employee’s start date.

4. Wait for a final determination from your State Workforce Agency. The determination will

indicate whether the employee is certified as meeting the eligibility for one of the WOTC

target groups.

5. After the target group employee is certified by the State Workforce Agency, file for the tax

credit with the Internal Revenue Service.

Visit the WOTC web-site, http://www.doleta.gov/wotc, for more information on eligibility

requirements, how to apply for the tax credit, and WOTC contacts in your state.

Visit the IRS web-site, http://www.irs.gov, for more information on how to claim the tax credit.