PSG | Tax Credit Services | Federal Hiring Credits | WOTC
Federal Hiring Credits
The Work Opportunity Tax Credit (WOTC) provides a federal income tax credit to businesses who hire individuals from a targeted group. Targeted Groups include:
- Members of a family receiving Temporary Assistance for Needy Families (TANF)
- Veterans that are unemployed, receiving food stamps, or have a service-connected disability
- Ex-felons hired no later than one year after conviction or release from prison
- An individual between the ages of 18-39 and residing in an empowerment zone, enterprise community or renewal community
- Vocational rehabilitation referrals
- Qualified summer youth ages 16-17 living in an empowerment zone, enterprise community or renewal community
- Qualified food stamp recipients (SNAP) between the ages of 18-39
- Supplemental security income (SSI) recipient
- Long-term (18+ months) family assistance recipients
The maximum credit amount per employee ranges from $2,400 - $9,600 depending on their target group eligibility. For most target groups, the credit is calculated as 40% of the first year wages of $6,000 per qualified employee ($2,400 max). Other target groups can increase qualified first year wages up to $24,000 per employee ($9,600 max).
Federal Empowerment Zones
The federal government has designated 30 urban and 10 rural Empowerment Zones throughout the country. Empowerment Zones provide employers with a hiring credit for qualified employees who live and work in the Empowerment Zone. The credit is up to $3,000 per employee each year, calculated on 20% of the employee's first $15,000 in wages.
Contact Joseph Abdallah to discuss how your business can benefit from federal hiring credit programs.