The Employment Connection Work Opportunity Tax Credit


Work Opportunity Tax Credit "Information Sheet"

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 employer.
  • 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. 518-457-6823

CERTIFICATIONS

     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.

TARGET GROUPS

     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 disability.

     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)

 



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