Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credit (WOTC) is a federal tax credit incentive that Congress provides to private for-profit businesses when hiring individuals from populations who have consistently faced significant barriers to employment. These federal tax credits encourage employers to hire from eleven targeted groups of job seekers by reducing employers’ federal income tax liability by $2,400 per qualified hire, and as much as $9,600 per qualified hire for certain unemployed veterans.
A participating employer may qualify for multiple federal tax credits, depending on the number of WOTC-qualified hires made by the company. An additional benefit of this program is that the employment of persons in these target populations returns them to work and the mainstream, as they earn a steady income and are better able to contribute to the economy.
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Additional information can be found at the U.S. Department of Labor WOTC website.
On December 31, 2013, the Congressional authorization for the WOTC expired. To improve customer service and allow for the time-sensitive nature in which applications must be filed, the N.C. WOTC program has established an interim processing system and encourages employers to continue filing applications during this authorization lapse.
In the past, Congress has retroactively approved applications, but employers who apply for certification are not guaranteed reimbursement until the WOTC is re-authorized.