"Employer's Guide to the Work Opportunity Pportunity Tax Credit"

Download pdf Fill PDF online

Employer's Guide to the Work Opportunity Pportunity Tax Credit is a 9-page legal document that was released by the U.S. Department of Labor - Employment & Training Administration on August 1, 2014 and used nation-wide.

Form Details:

The latest edition currently provided by the U.S. Department of Labor - Employment & Training Administration;
Ready to use and print;
Easy to customize;
Compatible with most PDF-viewing applications;
Fill out the form in our online filing application.

Download a printable version of the form by clicking the link below or browse more legal forms and templates provided by the issuing department.

Download "Employer's Guide to the Work Opportunity Pportunity Tax Credit"

276 times

Rate (4.3 / 5) 19 votes

Show Pagination

E E E E

G G G G

MPLOYER’S

UIDE

TO THE

O O O O

ORK

PPORTUNITY

ORK

PPORTUNITY

T T T T

C C C C

REDIT

August

August 2014

2014

E E E E

G G G G

MPLOYER’S

UIDE

TO THE

O O O O

ORK

PPORTUNITY

ORK

PPORTUNITY

T T T T

C C C C

REDIT

August

August 2014

2014

WHAT IS WOTC?

The

Work Opportunity Tax Credit (WOTC)

is a federal tax credit available to employers who hire

individuals from eligible target groups with significant barriers to employment. Each year, employers

claim over $1 billion in tax credits under the WOTC program. The information contained in this guide

will assist you in applying for and obtaining the tax credit.

Potential For Reduced Tax Liability

Employers hiring target group employees may be eligible to

reduce their federal income tax liability by as much as $9,600

per employee hired.

Employers Make the Hiring Decision

WOTC reduces an employer’s cost of doing business and

requires little paperwork, while helping those in need to find

and retain good jobs.

The U.S. Economy Benefits

The success and growth of this income tax credit for private-

sector business is beneficial for all who participate, while

increasing America’s economic growth and productivity.

HOW DOES WOTC WORK?

Any private sector business that hires a new employee from an eligible target group may apply for

WOTC. In addition, the tax credit is available to certain tax-exempt organizations that hire new

employees from the WOTC veterans target group.

To apply, employers complete and submit the required WOTC forms outlined in the simple step-by-

step process described in this guide.

There is no limit on the number of individuals an employer can

hire in order to qualify to claim the tax credit. For additional information and resources on WOTC, visit

www.doleta.gov/wotc.

Employer’s Guide to the Work Opportunity Tax Credit

July 2014

U.S. Department of Labor, Employment and Training Administration

WHO IS ELIGIBLE?

WOTC Target Groups

Veteran

To be considered a veteran eligible for WOTC, an individual must meet these two standards:

1. 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

2. Cannot 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.

To be eligible for WOTC, a veteran must also be one of the following:

A member of a family that received Supplemental Nutrition Assistance Program benefits

•

(food stamps) for at least 3-months during the 15-month period ending on the hiring date;

Entitled to compensation for a service-connected disability and was:

•

o Hired within 1 year of discharge or release from active duty, or

o Unemployed for at least 6 months in the year ending on the hiring date; OR

Unemployed for:

•

o At least 4 weeks (but less than 6 months) in the year ending on the hiring date, or

o At least 6 months in the year ending on the hiring date.

Long-Term or

Short-term Temporary Assistance for Needy Families (TANF) Recipient – An individual who is a

member of a family that:

Short-Term

Received TANF benefits for any 9 months during the 18-month period ending on the

Temporary

•

hiring date.

Assistance for

Needy Families

Long-term TANF Recipient – An individual who is a member of a family that meets one of the

Recipient

following:

Received TANF benefits for at least 18 consecutive months ending on the hiring date; OR

•

Stopped being eligible for TANF payments during the past 2 years because a Federal or

•

state law limited the maximum time those payments could be made, and the individual is

hired not more than 2 years after such eligibility ended; OR

Received TANF benefits for any 18 months after August 5, 1997, and has a hiring date that

•

is not more than 2 years after the end of the earliest 18-month period after August 5,

1997.

Supplemental

A Supplemental Nutrition Assistance Program (SNAP) recipient age 18-39 years who is a member

of a family that received SNAP benefits (food stamps) for:

Nutrition

The 6-month period ending on the hiring date; OR

Assistance

•

At least 3 of the 5 months ending on the hiring date, in the case of a family member who

Program Recipient

•

ceased to be eligible for such assistance under Section 6(o) of the Food Stamp Act of

(Food Stamps)

1977.

Designated

An 18-39 year old who lives within one of the federally-designated Rural Renewal Counties or

Empowerment Zones. For additional information on Rural Renewal Counties or Empowerment

Community

Zones, please visit:

Resident

http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopm

ent/programs/rc.

A listing of current Empowerment Zones (EZs) can be found at:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopm

ent/programs/rc/ezcontacts.

http://egis.hud.gov/ezrclocator/.

To locate Empowerment Zones, visit the EZ Locator at:

Employer’s Guide to the Work Opportunity Tax Credit

July 2014

U.S. Department of Labor, Employment and Training Administration

Vocational

An individual with a disability who completed or is completing rehabilitative services from a state-

certified agency, an Employment Network under the Ticket to Work program, or the U.S.

Rehabilitation

Department of Veteran Affairs.

Referral

Ex-Felon

An individual who:

Has been convicted of a felony; AND

•

Who is hired within 1 year after the conviction or release date from prison.

•

Supplemental

An individual who received Supplemental Security Income (SSI) benefits for any month that ended

during the 60-day period ending on the hire date.

Security Income

Recipient

Summer Youth

A 16 or 17 year-old youth who:

Employee

Works for the employer between May 1

and September 15

; AND

•

Lives within one of the federally-designated Empowerment Zones.

•

For additional information on Rural Renewal Counties or Empowerment Zones, please visit:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopm

ent/programs/rc.

A listing of current Empowerment Zones (EZs) can be found at:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/comm_planning/economicdevelopm

ent/programs/rc/ezcontacts.

To locate Empowerment Zones, visit the EZ Locator at:

http://egis.hud.gov/ezrclocator/.

Some employees do not qualify the employer for the WOTC. They include:

Relatives and dependents of the employer, including sons, daughters, stepchildren, spouses,

•

fathers, mothers, brothers, sisters, step-brothers or sisters, nephews, nieces, uncles, aunts,

cousins, or in-laws.

Former employees, regardless of how long it has been since he/she last worked for the employer.

•

Majority owners of the business.

•

HOW TO CALCULATE THE TAX CREDIT

The amount of the tax credit that employers can claim depends on the target group of the individual

hired, the wages paid to that individual, and the number of hours that individual worked during the

first year of employment. There is also a maximum tax credit that can be earned for each target group.

Employees must work at least 120 hours in the first year of employment for the employer to qualify to

claim the tax credit with the Internal Revenue Service (IRS). The tax credit is generally calculated as

follows; however, please refer to the chart on the following page for full details.

After Working at Least 120 Hours

The employer may claim a tax credit equal to 25% of the new hire's first year of qualified

wages. The maximum tax credit on first year wages is between $750 and $6,000, depending on

the eligible target group.

Employer’s Guide to the Work Opportunity Tax Credit

July 2014

U.S. Department of Labor, Employment and Training Administration

After Working at Least 400 Hours

The employer may claim a tax credit equal to 40% of the new hire's first year of wages. The

maximum tax credit on first year wages is between $1,200 and $9,600, depending on the

eligible target group.

For the Long-term Temporary Assistance for Needy Families (TANF) Recipient target group, the

credit is also available to employers in the second year of employment. The employer may claim a tax

credit equal to 50% of second year wages, up to the maximum tax credit of $5,000.

MAXIMUM TAX CREDIT AMOUNTS

Worked at least 120 hours but

Veteran Target Group

Worked at least 400 hours

less than 400 hours

Receives SNAP (food stamps)

Up to $1,500

Up to $2,400

benefits

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Entitled to compensation for service-connected disability:

Up to $3,000

Up to $4,800

Hired 1 year after leaving service

(25% of $12,000 of first-year wages)

(40% of $12,000 of first-year wages)

Unemployed at least 6 months

Up to $6,000

Up to $9,600

(25% of $24,000 of first-year wages)

(40% of $24,000 of first-year wages)

Unemployed:

At least 4 weeks

Up to $1,500

Up to $ 2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

At least 6 months

Up to $ 3,500

Up to $5,600

(25% of $14,000 of first-year wages)

(40% of $14,000 of first-year wages)

Worked at least 120 hours but

Other WOTC Target Groups

Worked at least 400 hours

less than 400 hours

Short-Term TANF Recipient

Up to $1,500

Up to $2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Long-Term TANF Recipient

N/A

Up to $9,000

(over 2 years)

(40% of $10,000 of first-year wages and

50% of $10,000 of second-year wages)

Up to $1,500

Up to $2,400

SNAP (food stamp) Recipient

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Designated Community Resident

Up to $1,500

Up to $2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Vocational Rehabilitation Referral

Up to $1,500

Up to $2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Ex-Felon

Up to $1,500

Up to $2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

SSI Recipient

Up to $1,500

Up to $2,400

(25% of $6,000 of first-year wages)

(40% of $6,000 of first-year wages)

Summer Youth Employee

Up to $750

Up to $1,200

(25% of $3,000 of first-year wages)

(40% of $3,000 of first-year wages)

Employer’s Guide to the Work Opportunity Tax Credit

July 2014

U.S. Department of Labor, Employment and Training Administration

Featured Tags

Bill of Sale U.S. Department of Veterans Affairs United States Army Vehicle Bill of Sale U.S. Department of Defense Boat Bill of Sale Firearm Bill of Sale Generic Bill of Sale Cover Letter Template Resume Templates U.S. Department of the Treasury - Internal Revenue Service BMI Chart Resignation Letter Template Multiplication Chart Graph Paper

"Employer's Guide to the Work Opportunity Pportunity Tax Credit"

Download "Employer's Guide to the Work Opportunity Pportunity Tax Credit"

Popular Articles

Most popular documents

Featured Tags

Most popular documents

Popular Articles

"Employer's Guide to the Work Opportunity Pportunity Tax Credit"

Download "Employer's Guide to the Work Opportunity Pportunity Tax Credit"

Popular Articles

Most popular documents

Featured Tags

Related forms

Most popular documents

Related Documents

Popular Articles