Work Opportunity Tax Credit Extended Until 2025
Are you hiring a new employee(s)? If you are, you should check out the Work Opportunity Tax Credit (WOTC) - a credit that encourages employers to hire workers certified as members of any of the ten targeted groups facing barriers to employment.
By the way, the WOTC has been extended through the end of 2025.
10 Groups Eligible For A WOTC:
- Temporary assistance for needy families recipients.
- Qualified unemployed veterans, including disabled veterans.
- Formerly incarcerated individuals.
- Designated community residents living in Empowerment Zones or Rural Renewal Counties.
- Vocational rehabilitation referrals.
- Summer youth employees living in Empowerment Zones.
- Supplemental Nutrition Assistance Program (SNAP) recipients.
- Supplemental Security Income (SSI) recipients.
- Long-term family assistance recipients.
- Long-term unemployment recipients.
What Is WOTC?
The WOTC* is a cost-effective hiring incentive that has helped over 30 million people move off public assistance and into the workforce. Since its enactment in 1996, WOTC has incentivized employers to hire stigmatized individuals, while saving billions in government spending.
*WOTC saves Federal and State Governments an estimated $202 billion over 10 years.
Certification Requirement.
To claim your credit, you, the employer, must first get certification that an individual is a member of the above-mentioned targeted group.
To receive certification for each employee, you need to submit IRS Form 8850 to the state workforce agency (SWA) of the state in which your business is located (where the employee works) generally no later than the 28th calendar day after the date the individual begins working for you.
