| | Work Opportunity Tax Credit What Is The Work Opportunity Tax Credit? The American Taxpayer Relief Act of 2012 (the Act) extends the Work Opportunity Tax Credit (WOTC) for taxable employers hiring members of targeted groups before Jan.1, 2014, and for tax-exempt employers hiring qualified veterans before Jan. 1, 2014. In 2012, the WOTC was available for employers hiring qualified veterans, and not for hiring members of other targeted groups. Therefore, the Act retroactively extends the availability of the WOTC for taxable employers who hired individuals from targeted groups, other than qualified veterans, in 2012. Under this program, employers can claim a tax credit on their federal taxes for each qualifying new hire. The amount of the tax credit is based on the amount of wages paid to each eligible worker. Employers cannot claim the Work Opportunity Tax Credit for their relatives, former employees or undocumented workers. Also, each eligible worker must be employed for at least 120 hours in order for the employer to claim the tax credit. If the new hire has another job at the time s/he is hired by the requesting employer, but otherwise meets the eligibility criteria, then the new employer can claim the tax credit. Targeted Groups include: Group A – Qualified Short-Term Recipients of Temporary Assistance to Needy Families (TANF) Any individual who: • Is a member of a family that received TANF benefits for any 9-month period during the 18-month period ending on the hiring date. Group B – Qualified Veterans Any qualified veteran who is: • Ba - a member of a family that received food stamps, i.e., Supplemental Nutrition Assistance Program (SNAP) benefits for at least a 3-month period during the 15-month period ending on the hiring date, or • Bb - entitled to compensation for a service-connected disability hired within one year of discharge or release from active duty, or • Bc - entitled to compensation for a service-connected disability and unemployed for a period or periods totaling at least 6 months of the year ending on the hiring date, or • Bd - unemployed for at least 4 weeks (but less than 6 months) during the one-year period ending on the hiring date, or • Be - unemployed for at least 6 months or more within one year of the hiring date. Note: To be considered a qualifi ed veteran for this purpose the individual must meet these two standards: 1.) 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.) Not have a period of active duty, not including training, of more than 90 days that ended during the 60-day period concluding on the hiring date. Group C – Qualified Ex-Felon Any individual who: • Has been convicted of a felony under any statute of the United States or any state. • Has a hire date that is not more than one year after the last date on which the individual was convicted (if not incarcerated) or was released from prison. Group D – Qualified Designated Community Resident Any individual age 18 through 39 who, on the hire date: • Is a resident of a designated Federal Empowerment Zone (EZ) or Rural Renewal County (RRC). Group E – Qualified Vocational Rehabilitation Referral Any individual who: • Has a physical or mental disability which results in a substantial barrier to employment, and • Is hired within two years of receiving those services. Group F – Qualified Summer Youth Employee Any individual who: • Is age 16 through 17 on the hire date and is a resident of a Federal Empowerment Zone (EZ) or Rural Renewal County and • Has not been employed by the same employer prior to the 90-day summer period between May 1 and September 15. Group G – Qualified Food Stamp (SNAP) Recipient Any individual who: • Is age 18 through 39 on the hiring date and is a member of a family who received food stamps/ Supplemental Nutrition Assistance Program (SNAP) benefi ts for a consecutive six-month period ending on the hiring date, or • Qualifies under federal law as an "able-bodied adult without dependents" (ABAWD 1), is 18 through 39 years of age on the hiring date, and • Received SNAP benefi ts for at least three months out of the five-month period ending on the hiring date and is no longer receiving SNAP benefi ts on the hiring date. Group H – Qualified Supplemental Security Income Recipient Any individual who: • Is receiving Supplemental Security Income (SSI) payments under Title XVI of the Social Security Act for any month ending within the 60-day period ending on the hiring date. Note: Those receiving Social Security Disability Income (SSDI) are not the same as SSI recipients. For More Information About The WOTC, click here. |
