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Work Opportunity Tax Credits |
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Employers are allowed to claim the Work Opportunity Tax Credit on their federal tax return for each new employee who qualifies. The tax credit applies only to the employee’s first year of employment. For most categories, wages are capped at $6,000, with a maximum credit per new hire of $2,400. The credit is calculated as follows:
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40% of qualified first-year wages for those employed 400 or more hours
- 25% of first year wages for those employed at least 120 hours
Qualifying Employees:
The new employee must belong to one of the following target groups:
- A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) for any 9 month period during the 18 month period ending on the hiring date (this is a “short term assistance recipient”)
- Veteran who is receiving or recently received food stamps. Also, a disabled veteran who was released from active duty less than a year from date of hire
- An ex-felon
- An individual age 18-39 who lives within an Empowerment Zone (EZ), an Enterprise Community (EC) or a Rural Renewal County
- A disabled person who completed or is completing rehabilitative services approved by a State or the US Department of Veteran Affairs
- A 16-17 year old EZ resident hired as a Summer Youth Employee
- An individual age 18-39 that is receiving or recently received Food Stamps
- A recipient of Supplemental Security Income (SSI) benefits for any month during the 60 days before date of hire
- A “long term family assistance recipient” who is receiving or recently received TANF payments for 18 consecutive months ending on the date of hire
Many of your employees probably fall under the targeted categories for these credits, and we make the process simple! Contact Sonya Wright at
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to get set up on our program today!! The sooner you start, the more you’ll be able to take advantage of this opportunity!
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