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Work Opportunity Tax Credit (WOTC)

The WOTC is a federal program that provides tax incentives to employers who hire individuals who have traditionally faced barriers to employment.

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Hermann Park – Houston

What is the WOTC?

The Work Opportunity Tax Credit (WOTC) is a federal program that provides tax incentives to employers who hire and invest in individuals who have traditionally faced barriers to employment. To qualify, employers must hire an individual who belongs to a targeted group and receive certification verifying their membership in the group.

The WOTC can be a valuable tool for businesses looking to save money and support underrepresented groups in the labor market. The amount of the WOTC that an employer can claim depends on the targeted group of the new hire and the number of hours worked. The credit can be claimed for a period up to two years from the date of hire.

Below is a summary of the maximum credit amounts for each targeted group:

Long-term Temporary Assistance for Needy Families (TANF) recipients

$9,000

Short-term Temporary Assistance for Needy Families (TANF) recipients

$2,400

Supplemental Nutrition Assistance Program (SNAP, or food stamp) recipients

$2,400

Veterans

$2,400 to $9,000

Depending on the length of unemployment and the number of hours worked

Formerly Incarcerated Persons

$2,400

Designated Community Residents

$2,400

Vocational Rehabilitation Referrals

$2,400

Supplemental Security Income (SSI) recipients:

$2,400

Summer Youth Employees

$1,200

How can Royse Partners assist?

We help businesses claim the Work Opportunity Tax Credit (WOTC) by providing guidance and assistance with the certification and application process.

To claim the credit, employers must first obtain certification that your new hire is a member of a targeted group. The certification process can be complex and time-consuming and may require the submission of various forms and documentation. Royse Partners is here to assist you in navigating this process and ensuring that you have the necessary documentation to secure the certification.

Once the required certification is secured, we also assist with completing Form 5884, Work Opportunity Credit, and attaching it to your business’s tax return or payroll tax return, as applicable. Royse Partners also provides ongoing support and guidance to ensure that your business is able to maximize the credit.

Overall, our team can help businesses claim the WOTC more efficiently and effectively, saving time and effort while maximizing the financial benefits of the program.

Common Questions

The WOTC is a federal program that provides tax incentives to employers who hire and invest in individuals who have traditionally faced barriers to employment. These individuals may include veterans, SNAP (food stamp) recipients, TANF recipients, ex-felons, and other disadvantaged groups.

To qualify for the WOTC, an individual must be a member of a targeted group and be hired by an eligible employer. The targeted groups include veterans, SNAP recipients, TANF recipients, ex-felons, and other disadvantaged groups. The employer must also obtain certification verifying the new hire’s membership in the targeted group.

The amount of the WOTC that an employer can claim depends on the targeted group of the new hire and the number of hours worked. The credit can be claimed for a period of up to two years from the date of hire. The maximum credit amounts for each targeted group range from $1,200 to $9,600.

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