Work Opportunity Tax Credit

• Posted on December 10, 2008
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Employers can qualify for a tax credit for qualified wages paid to members of targeted groups.  The credit, except for long-term family assistance recipients and summer youth employees, equals 40% (25% for employment of 400 hours or less) of qualified first-year wages ($6,000 cap) for a maximum credit of $2,400 for each eligible employee.

The Work Opportunity Tax Credit (WOTC) is available on an elective basis for employers hiring individuals from one or more of specified targeted groups. The amount of the credit available to an employer is determined by the amount of qualified wages paid by the employer.  Generally, qualified wages consist of wages for services rendered by a member of a targeted group during the one-year period beginning with the day the individual begins work for the employer.