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Work Opportunity Tax Credit
What it is:
A credit that is claimed on an employer's federal income tax.
A credit of 35% of the first $6,000 paid in wages for each
A credit that applies only to new hires.
The employer must retain the employee for at least 180 days
or 400 hours (20 days or 120 hours for summer youth) to claim
The credit applies only to employees hired into a business
or trade. Maids, chauffeurs and other household employees do not
qualify for this credit.
The WOTC program is administered at the federal level by the Employment
and Training Administration, U.S.
Department of Labor, and the Internal
Revenue Service (IRS), U.S.
Department of Treasury.
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Eligible Job Applicants:
Low income ex-offenders (Economically disadvantaged individuals
who have been convicted of a felony or released from a prison
in the 12 months prior to hire).
Individuals whose families receive welfare benefits.
Veterans who are receiving either welfare benefits or food
High risk youth (18-24 years old) who live in a federally-designated
empowerment zone or enterprise community (EZ/EC).
Individuals with disabilities who have received state or VA
rehabilitation services. High risk summer youth (16-17 year olds),
hired between 5/1 - 9/15, who live in an EZ/EC.
18-24 year olds whose families receive food stamps.
How it Works
The employer and job applicant complete a pre-screen questionnaire,
IRS Form 8850, on or before the date the individual starts to
The employer and employee complete an Individual Characteristic
The employer must mail IRS Form 8850 and the ETA-9061 within
21 days of the start to work date to their local Employment Services
A qualified agency issues a conditional certification (ETA-9062)
to show that the individual is eligible for the tax credit.
The employer and applicant complete the IRS Form 8850.
The employer completes the employer section of the ETA-9061.
The employer submits the IRS Form 8850 and ETA-9062 within
21 days from the employment start date - no documentation is necessary.
Only Two Simple Forms are Required:
For more information, or to obtain copies of the required paperwork,
please call the WOTC Program at 303-318-8824 or e-mail email@example.com.