Work Opportunity Tax Credit "Information
THE WOTC CREDIT
The Work Opportunity Tax Credit Program
(WOTC) is designed to encourage employers to hire job seekers from
nine targeted groups with barriers to employment. The information
contained in this booklet incorporates federal legislative revisions
effective January 1st, 2009.
Employers that hire WOTC qualified employees
are eligible for one of three possible tax credits. Employees must perform
a minimum of 120 hours of service in order to generate a tax credit
for their employers.The WOTC has been extended to cover individuals
who begin to work for an employer before September 1st,2011.
- The Full Rate--A credit equal to 40% of the first $6,000 in
qualified first year wages, for a maximum credit of $2,400. The
WOTC certified employee must work a minimum of 400 hours for the
- The Reduced Rate--A credit equal to 25% of the first $6,000
in qualified first year wages, for a maximum credit of $1,500.
The WOTC-certified employee must perform at least 120 hours, but
less than 400 hours, of service for the employer.
- The Summer Youth Rate--A credit of 25% of the first $3,000 in
any 90-day period between May 1,and September 15 of any given year,
for a maximum credit of $750. The employee, certified as a Summer
Youth, must work at least 120 hours for the employer.
PRE-SCREENING NOTICE and CERTIFICATION REQUEST FORM 8850
For the employer to be eligible for a
WOTC credit, a Pre-Screening Notice (PSN) IRS Form 8850, must be
filled out by the job applicant and the employer on or before the
hire date. The PSN must be signed, dated and postmarked within 28
days after the first day of work and must be submitted to the New
York State Department of Labor. Form 8850 is the single most
important form in the WOTC Program. IRS Form 8850 may be obtained
on the Internet (www.irs.ustreas.gov)
Web Site, or by calling 1-800-TAX-FORM. Your local Labor Department
Community Service Center or the Economic Development Services Unit
(EDSU) can also provide copies of IRS Form 8850. The Internal Revenue
Service requires original signatures on IRS Form 8850.
USDOL ETA FORMS 9061 and 9062
The Labor Department uses the Individual
Characteristic Form (ICF) ES 9061 to gather statistical information
and target group eligibility information from employers. This form
is available for EDSU or your local Labor Department Community Service
Center. A separate ICF (or in certain instances the Conditional
Certification Form ETA 9062) must be completed and returned to the
Department of Labor for each WOTC applicant.Complete ONE of these forms
as appropriate and mail together with IRS Form 8850 to NY State Dept
of Labor, Building 12, Room 200,State Office Bldg. Albany, NY 12240.
The Economic Development Services Unit
issues WOTC certifications after ensuring that a worker meets the
required eligibility characteristics of a WOTC target group. A WOTC
certificate may be revoked if it is based on false or invalid information.
Individuals hired from the following target
groups can entitle their employers to up to $2,400 in WOTC tax credits:
Qualified IV-A / Temporary Assistance
for Needy Families (TANF) or Aid to Families with Dependent
Children (AFDC) Recipient, or a member of a family household,
which has received public assistance TANF or AFDC for at least one
day in each of nine months during the eighteen month period ending
on the hire date.
Qualified Food Stamp Recipient, who
is age 18 through 39 as of the hire date, and a member of a family
household that has received food stamp assistance for the past six
month period ending on the hire date, or a member of a family household
that is no longer eligible under Sec. 6(o) of the Food Stamp Act
of 1977, and has received food stamp assistance for at least three
months within the last five months that end on the hire date.
Qualified Veteran, who is a member
of a family household that has received food stamp assistance for
at least a three month period ending during the twelve month period
ending on the hire date, and who has served on active duty for more
that 180 days, or who has been discharged for a service-related
Qualified Ex-Felon, who has been
hired within one year of the latest conviction or release from prison,
and whose annualized income during the six month period prior to
the hire date is seventy percent or less of the Federal
Lower Living Standard.
Designated Community resident,
an individual who is at least age 18 but not yet age 40 on the hiring date
and lives within an empowerment zone, or renewal community.
Vocational Rehabilitation Referral,
who has completed or is receiving rehabilitative services under
an approved plan from ACCES, the Commission for the Blind and Visually
Handicapped,the Veterans Administration or Ticket to Work program.
Qualified Summer Youth, who is
age 16 or 17, whose principal residence is in a Federally designated
Empowerment Zone or Enterprise Community, and who is employed between
May 1 and September 15, of any given year.
Long Term Family welfare recipient, Members
of a family that received Temporary Assistance for Needy Families(TANF) or its predecessor program, Aid to Families with Dependent Children(AFDC), for at least
18 consecutive months before date of hire, or whose family's TANF/AFDC eligibility
expired under federal or state law after August 5,1997, or whose family received TANF for at least 18 months (whether or not consecutive) beginning after August 5th, 1997 are eligible for an enhanced WOTC Tax Credit.
SSI Recipient, an individual who
is certified by the Social Security Administration or the state
Social Services agency as receiving Supplemental Security Income
Benefits for any, month during the 60 days before date of hire.
Also See Workers With Disabilities Employment Tax Credit (WETC)
Type in: (www.theemploymentconnect.com/wetc.html)