Work Opportunity Tax Credit

What is a Work Opportunity Tax Credit?

A Work Opportunity Tax Credit (WOTC) is a federal tax credit that employers get for hiring certain people, such as those in target areas who have consistently faced barriers to employment. For example, the WOTC frequently applies to minorities or people with disabilities—demographics that, without the WOTC, may usually have a hard time finding long-term employment but want to earn a steady income and become contributing taxpayers. And depending on the person you hire, you could receive a maximum WOTC from $1,200 to $9,600.

Am I Eligible to Receive One?

There’s a good chance you may be, as there are 12 usual groups of job seekers that qualify you for the WOTC:

  • Long-Term Temporary Assistance for Needy Families (TANF)
  • Other TANF Recipients
  • Veterans
  • SNAP Recipients Aged 18-39
  • Designated Community Resident Aged 18-39
  • Summer Youth Aged 16-17
  • Vocational Rehabilitation Referral
  • Ex-Felon
  • Supplemental Security Income (SSI) Recipient
  • Hurricane Katrina Employee
  • Unemployed Veteran
  • Disconnected Youth Aged 16-24 (on hiring date)

However, despite this wide range of employee groups that will qualify you for the WOTC, there are a few that will not:

  • Relatives and Dependents
  • Former Employees
  • Majority Owners of the Employer

To get the best idea of how you can qualify for the WOTC, read this fact sheet and visit the United States Department of Labor Employment and Training Administration website.

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