The Work Opportunity Tax Credit (WOTC) is a federal tax credit that reduces employers' tax liability when they hire individuals from 12 targeted groups that experience barriers to employment. The WOTC program allows employers to receive tax credits of up to $9,000 per new hire. To qualify for the credit, new employees must work a minimum of 120 hours over a period of at least 40 days. The WOTC program has been reauthorized until August 31, 2011.

1. WORK OPPORTUNITY TAX CREDIT
The Work Opportunity Tax Credit (WOTC) is a federal tax Family Assistance and a second change was the creation
credit that reduces the federal tax liability of private-for- of the new Disabled Veteran target group that went into
profit employers. Employers can hire from twelve differ- effect May 25, 2007. On February 17th as part of the
ent targeted groups: American Recovery and Reinvestment Act (ARRA) of
♦ Qualified Temporary Assistance to needy Families 2009 two new categories were created Unemployed Vet-
Recipients (TANF) erans and Disconnected Youth.
♦ Qualified Veterans/Disabled Veterans
♦ Unemployed Veterans The WOTC Program has been reauthorized until
♦ Qualified Ex-felons August 31, 2011
♦ Qualified Designated Community Residents (DCR)
residing in an Empowerment Zone (EZ), Renewal
Community (RC), or in a Rural Renewal County (RRC) What makes us so effective? Not only do we offer the
screening tools and credit calculations, but in order for
♦ Qualified Vocational Rehabilitation Agency Referrals
your company to maximize your potential benefit your tax
♦ Disconnected Youth partner must do more. That’s why we assist all of our
♦ Qualified Summer Youth (SY) clients in the following areas:
♦ Qualified Food Stamp Recipients (FS) ♦ Customizable screening options which includes
♦ Qualified Supplemental Security Income Recipients ♦ Live operator phone screening
(SSI)
♦ Conventional paper screening
♦ Qualified Long-Term Family Assistance Recipients
♦ We help manage internal compliance
(LTFAR)
♦ Match screened new employees to actual new
♦ Hurricane Katrina Employee
hires.
Maximum Credit Available ♦ Identify non-compliant areas, and work with
them to make them compliant
♦ $1,200 for each new Summer Youth* hired;
♦ Educate hiring managers about the credit
♦ $2,400 for each new Adult hired;
♦ Make sure that supervisors are aware of em-
♦ $4,800 for each new Disabled Veteran hired; and
ployees eligibility so the company maximizes
♦ $9,000 for each new Long Term Family Assistance
the credit.
Recipient hired over a two year period.
♦ Identify how employer can target potentially
*The credit is based on 40% of up to $6,000 in qualified certifiable job candidate pools.
wages during the first year of employment. Summer COST-
FOR A COST-FREE ANALYSIS ON WHETHER YOUR COMPANY
Youth qualify for 40% of the first $3,000 in wages during (WOTC),
QUALIFIES FOR WORK OPPORTUNITY TAX CREDITS (WOTC),
the required working period of May 1 through September PLEASE CONTACT:
15.
PayChoice Tax Incentives Department
Minimum Employment or Retention Period TaxCredits@paychoice.com
All new employees must work a minimum of 120 hours Or
and individuals hired as Summer Youth employees must 888-811-7988
work at least 90 days, between May 1 and September
15, before an employer is eligible to claim the tax credit.
Recent program changes took place in 2007 that im-
pacted multiple target groups. One such change was the
consolidation of the Welfare-To-Work Tax credit program
into the WOTC program to become known as Long-Term
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