The following tax credits can help alleviate your business tax burden. Each can be used in conjunction with the training programs listed on this web site.
WHAT IS THE WORK OPPORTUNITY TAX CREDIT?
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers who hire individuals from eligible target groups with significant barriers to employment. Each year, employers claim over $1 billion in tax credits under the WOTC program. The success and growth of this income tax credit for business is beneficial for all who participate, while increasing America’s economic growth and productivity.
- WOTC reduces an employer’s cost of doing business, requires little paperwork, and applying for WOTC is simple.
- WOTC can reduce an employer’s federal income tax liability by as much as $9,600 per employee hired.
- There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit.
- Certain tax-exempt organizations can take advantage of WOTC by hiring eligible veterans and receiving a credit against the employer’s share of Social Security taxes.
Who is Eligible?
- TANF Recipients
- SNAP (food stamp) Recipients
- Designated Community Residents
- Vocational Rehabilitation Referral
- Supplemental Security Income Recipients
- Summer Youth Employees
Visit https://www.dol.gov/agencies/eta/wotc for more target group eligibility information.
WHAT IS THE WELFARE-TO-WORK TAX CREDIT?
WOTC can be added to an organization's tool kit for serving businesses. The tax credit can allow business customers to reduce their federal income tax liability between $2,400 and $9,600 per employee hired, per year. WOTC can help your qualified job seekers obtain employment by offering an incentive to employers who are considering hiring them. Qualified job seekers include veterans, TANF recipients, SNAP (Food Stamp) recipients, Vocational Rehabilitation participants, ex-offenders, SSI recipients, and individuals who live in Empowerment Zones or Rural Renewal Counties. Generally, long-term welfare recipients are those who have been receiving welfare benefits for at least 18 months. Call 1-800-432-5268 for more information.
Businesses that have Employees with Disabilities
Businesses accommodating people with disabilities may qualify for some of the following tax credits and deductions. More detailed information may be found in the IRS publications referenced.
Disabled Access Credit
The Disabled Access Credit provides a non-refundable credit for small businesses that incur expenditures for the purpose of providing access to persons with disabilities. An eligible small business is one that that earned $1 million or less or had no more than 30 full time employees in the previous year; they may take the credit each and every year they incur access expenditures. Refer to Form 8826, Disabled Access Credit (PDF), for information about eligible expenditures.
For more information about these tax incentives and their requisite forms, please see the Internal Revenue Service (IRS) website.