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Work Opportunity Tax Credit


What is WOTC?

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.

WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers.

Current Update on the WOTC Program

Transitional Relief Period for 2014 New Hire Certification Requests

IRS just published a notice of transition relief for WOTC, meaning that employers have additional time to submit their requests for 2014 WOTC certification. The relief period allows employers to submit WOTC certification requests until April 30, 2015, if they hired a member of a targeted group between January 1, 2014 and December 31, 2014.

Any State Workforce Agency (SWA) that has already issued denials to an employer that would otherwise have been approved under the transitional relief period should revisit those denials and re-process them, applying the IRS relief period, and reissuing determinations to those employers or consultants. SWAs should only issue a certification, if the certification request otherwise met all other requirements, including that new hires were employed between January 1, 2014 and December 31, 2014, and that the new hire met all the target group's eligibility criteria.

IRS Notice 2015-13 is available here: http://www.irs.gov/pub/irs-drop/n-15-13.pdf.

What does WOTC do?

WOTC helps targeted workers move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers, while participating employers are able to reduce their income tax liability.

How large is the tax credit?

The maximum tax credit ranges from $1,200 to $9,600, depending on the employee hired.

WOTC Program Reauthorization Update

The legislative authority for the WOTC program, which had expired on December 31, 2013, has been extended. President Obama signed the tax extension bill (the Act) on December 19, 2014. The current Act extends the WOTC program through December 31, 2014, and retroactively reauthorizes the program for new employees hired on or after January 1, 2014. At this time, the Department of Labor is working with the Internal Revenue Service (IRS) to issue reauthorization guidance to the state workforce agencies and the employer community. Employers should continue to submit WOTC applications to state workforce agencies within 28 calendar days after the new hire's start date. For further information, visit the IRS WOTC Website, view ETA's Interim Instructions on the 2014 Reauthorization and 2015 Hiatus, or look for updates on ETA's national WOTC website at www.doleta.gov/WOTC/ under "What's New."

 

Looking for more information?
Employers State Workforce Agency WOTC Coordinators Workforce & Community Partners