Federal Tax Savings Program Benefiting Employers and Job Seekers

Work Opportunity Tax Credit (or WOTC) Is a Federal Income Tax Credit that reduces the federal tax liability of ‘private for profit’ Employers. To qualify - Employers must hire eligible individuals from any one of eleven target groups.

Work Opportunity Tax Credit (or WOTC) The WOTC program’s legislative authority for all WOTC target groups expired on December 31, As a result, the program currently is undergoing an authorization lapse.

Work Opportunity Tax Credit (or WOTC) At this time, there is no indication whether Congress will pass legislation extending authority for the expired program and target groups beyond December 31, However, TWC will continue to accept applications (certification requests) in anticipation of a retroactive reauthorization. To be eligible for the tax credit during this period, employers must have properly filed requests for certification in a timely manner. All decisions will be held pending further legislative action.

WOTC - Benefits Improves the Employment Prospects of Disadvantaged Individuals Provides a Tax Incentive for the Prospective Employer

WOTC Credit Amounts Tax credit amounts range from $1,200 to $9,600 Most common amount certified per application is $2,400

Tax Credit – Up to $1,200 Summer Youth 16 to 17 years old as of the hire date Works for an employer between May 1 and September 15; and Lives in an empowerment zone.

Tax Credit – Up to $2,400 Supplemental Nutritional Assistance Program (SNAP) Benefits Recipients Veterans receiving SNAP Benefits Temporary Assistance for Needy Families (TANF) Recipients Ex-Felons

Tax Credit – Up to $2,400 Residents of Empowerment Zones or Rural Renewal Counties Individuals referred for Vocational Rehabilitation services Supplemental Security Income (SSI) Recipients

Tax Credit – Up to $9,000 Long Term Family Assistance Recipients Member of a family that has received TANF benefits for at least 18 consecutive months ending on the hire date. Credit is paid over a 2 year period, based on the number of hours worked

Tax Credit – Up to $9600 The Vow to Hire Heroes Act of 2011 Allows “private for profit” AND qualified “tax-exempt” organizations to participate by hiring qualified veterans The credit is available to organizations that employ qualified veterans and can be applied to the for-profit employer’s federal business income taxes or to the tax- exempt employer’s payroll taxes.

Tax Credit – Up to $9600 The Vow to Hire Heroes Act of 2011 Disabled Veterans A veteran who has a service-connected disability of at least 10 percent and was hired no later than one year after being released from active duty -OR- A veteran who has a service-connected disability of at least 10 percent and who has received at least six months of unemployment benefits during the year prior to the hire date

Tax Credit – Up to $5600 The Vow to Hire Heroes Act of 2011 Unemployed Veterans A veteran who has served at least 180 days of active duty and has received at least four weeks of unemployment benefits during the year prior to the hire date -OR- A veteran who has served at least 180 days of active duty and has received at least six months of unemployment benefits during the year prior to the hire date

Employers Don’t Have to Ask What Group Their New Hire Falls Into Verification of eligibility will be done by the TWC WOTC unit. For more information on target group qualifications, visit the WOTC website

What Does an Employer Need to Do to Apply for the Credit? Complete IRS Form 8850 (Prescreening Notice and Certification Request) Complete ETA Form 9061 Individual Characteristic Form Note: The employer may submit Form ETA-9062 in place of the ETA if provided to the job seeker by TWC or a participating agency.

What Does an Employer Need to Do to Apply for the Credit? Employers can download both current versions of the forms from our website

What Does an Employer Need to Do to Apply for the Credit? Mail, fax or both forms to: Texas Workforce Commission Attn: WOTC Unit 101 E. 15 th Street, Room 202T Austin, Texas Fax:

WOTC Application Requirements Postmark date/Fax receipt date/ receipt date within 28 days of start date Application must contain signatures on both forms (8850 must have both employer and new hire signatures)

WOTC Application Requirements Employers submitting forms by fax or will be required to maintain the original forms for the required retention period (5 years for certifications and 1 year for denials).

WOTC Yearly Growth WOTC has seen a continual increase in the number of applications filed each year. Calendar Year 2011 – 288,190 applications filed with 107, 381 certifications for a potential tax savings of $261,951, Calendar Year 2012 – 313,932 applications filed with 148,779 certifications for a potential tax savings of $360,807, Calendar Year 2013 – 352,881 applications filed with 137,358 certifications for a potential tax savings of $334,460,400.00

WOTC Contact Information Phone(800) Website