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What is it? The Work Opportunity Tax Credit (WOTC), which
replaces the Targeted Jobs Tax Credit (TJTC) Program, provides a tax credit for
employers who hire certain targeted low-income groups, including vocational
rehabilitation referrals, former AFDC recipients, veterans, ex-felons, food
stamp recipients, summer youth employees, and SSI recipients.
How does it apply to persons with disabilities? Applicants
who are Vocational Rehabilitation (VR) referrals are eligible.
A VR referral is certified by the State Employment Security Agency
(SESA) as:
- Having a physical or mental disability resulting in a hindrance
to employment; and
- Referred to an employer upon completion of or while receiving
rehabilitative services, pursuant to the Vocational Rehabilitation Act of 1973,
as amended.
What is the amount? A tax credit of up to 40 percent of the
first $6,000, or up to $2,400, in wages paid during the first 12 months for
each new hire.
What are the effective dates? January 1, 2002 through
December 31, 2003; this program is subject to yearly Congressional renewal.
What are the Minimum Employment Requirements? Eligible
employees must work 180 days or 400 hours; summer youth must work 20 days or
120 hours. A partial credit of 25 percent for certified employees who worked at
least 120 hours, but less than 400 hours, may be claimed by the employer.
What agency provides the WOTC certification?-The local
State Employment Security Agency (SESA).
How do I file for this credit? Complete and submit IRS Form
8850, "Pre-Screening Notices and Certification Request for the Work Opportunity
and Welfare-to-Work Credits," to your local SESA.
How does it work?
- The employer determines likely eligibility by including the
WOTC Pre-Screening Notice as part of the application process.
- On or before the day employment is offered, the Pre-Screening
Notice must be signed by the employer and employee and mailed to the SESA
within 21 days after the employee begins work.
- The employer documents eligibility (based on information
received from the employee) and submits documentation to the SESA.
- SESA certifies which individuals are eligible for WOTC, and
notifies the employer in writing for purposes of filing the tax credit.
Where do I obtain IRS Form 8850?
Call 1-800-829-3676
(Voice) 1-800-829-4059 (TTY)
http://www.irs.gov/pub/irs-fill/f8850.pdf
Where do I obtain additional information? Call
your State Employment Agency WOTC Coordinator or (202) 219-9092.
http://www.uses.doleta.gov/wotcdata.asp
Updated April 2002 |
