Work Opportunity Tax Credit (WOTC) Program Renewed Through 2019

Late last month, President Obama signed into law the Protecting Americans From Tax Hikes Act of 2015, a spending and tax bill that, among other things, extended the Work Opportunity Tax Credit (WOTC) retroactively from January 1, 2015 through December 31, 2019.

Administered by the US Department of Labor (DOL), the WOTC program is a federal financial incentive program that encourages employers to increase employment opportunities for individuals from certain targeted groups who have traditionally experienced significant barriers to employment. The potential tax benefits of participating in the WOTC are significant - employers can earn tax credits ranging from $2,400 to $9,600 per qualifying employee.

WOTC qualification requirements

To qualify for a tax credit, employers must screen all applicants for eligibility on or before the day a job offer is made. Employers can earn tax credits equal to between 25% and 40% of the first-year wages paid or incurred during the taxable year per each employee who is determined to be a member of a targeted group, up to the maximum credit for the target group each employee belongs to.

Targeted groups under WOTC include:

• Unemployed veterans (including disabled veterans)
• Temporary Assistance for Needy Families (TANF) recipients
• Food stamp (SNAP) recipients
• Designated community residents (those living in "empowerment zones" or "rural renewal counties")
• Vocational rehabilitation referred individuals
• Ex-felons
• Supplemental Security Income (SSI) recipients
• Summer youth employees (those living in "empowerment zones")

In addition to renewing and extending WOTC, the Protecting Americans From Tax Hikes Act of 2015 also added qualified long-term unemployed persons as a targeted group. According to the Act, an applicant will qualify as part of this group if they have been unemployed for at least 27 consecutive weeks and was receiving unemployment compensation from either their state or the federal government.

As part of its available human resources services offering, G&A Partners helps employers determine whether an employee is considered an eligible new hire under the WOTC program, as well as providing the necessary forms and filing assistance. For more information on G&A Partners' WOTC program, call 1-866-634-6713 to speak with a business advisor.