The Work Opportunity Tax Credit gives employers tax benefits for hiring people who fall within certain qualifying categories. This can be a big boon to companies and employers! Click through to learn the ins and outs.
In December 2015, an extension to the Work Opportunity Tax Credit was signed in law. It helps match employers with qualifying candidates, such as veterans, and provides a tax incentive for continued employment. What do you need to know about WOTC and how it can affect you and your business? Here are some basics.
- Qualifying veterans. To qualify for WOTC, the new employee must be a veteran who received SNAP (food stamp) benefits for a designated period of time, or a disabled or unemployed vet. For more details about these categories, the length of time to qualify for eligibility and more, review the WOTC page at the Department of Labor Employment and Training Administration website.
- Nonveteran qualifying candidates. There are also WOTC programs available for individuals who have not served in the United States military. To qualify, an individual must be a Temporary Assistance for Needy Families (TANF) recipient, a SNAP recipient, a resident of a qualifying community such as Rural Renewal Counties, an ex-felon or a Supplemental Security Income recipient. The official website can provide more on these target groups.
- Nonqualifying candidates. Besides individuals not listed among the target groups, there are certain individuals who are specifically disqualified from the WOTC programs. These include relatives or dependents, majority owners of the business and former employees of the company.
- Tax credit extension period. The WOTC program was renewed as part of the vote that avoided a government shutdown at the end of 2015. This included retroactively renewing the program from Jan. 1, 2015; a five-year extension through December 2019; and a new target group of long-term unemployed individuals.
Do you want to know whether your company can qualify for the WOTC program?
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