Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is a federal tax credit to incentivize hiring disadvantaged individuals. This credit is designed to encourage employers to assist potential employees who are recipients of governmental assistance progress. Some eligible employees that would help businesses qualify for the WOTC include, but is not limited to the following:

  • Recipients of SNAP (Supplemental Nutrition Assistance Program) benefits

  • Ex-felons, parolees

  • Disabled and/or unemployed veterans

  • Disabled individuals receiving SSI (Supplemental Security Income) benefits

  • Individuals who have been unemployed for at least a half year (27 consecutive weeks) and received unemployment benefits during this time period

Additionally, there are some states that offer their version of the WOTC as well:

  • Alaska

  • Arizona

  • Illinois

  • New York

  • Texas

Note that the WOTC must be applied for within 28 days of hiring eligible employees.