Benefit Your Business: Work Opportunity Tax Credit (WOTC)
WOTC Group Specifics
and Tax Facts for Start Work Dates (on or Before December 31, 2006)
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WOTC Group Specifics for Start Work Dates on or
Before December 31, 2006
Temporary Assistance to Needy Families (TANF) recipient
individual who received or is a member of a family that has
received, TANF assistance for any nine months during the 18-month
period ending on the hiring date.
- An individual convicted of a felony and hired within one year
after conviction or release from prison, and who is a member of a
federally-defined economically disadvantaged family.
Lower Living Standard Income Levels
Food Stamp Recipient – An individual aged 18 through 24, who is a member of a
family that has received Food Stamps for a specific time period
within the last six months.
- An individual who is 18 through 24 years old on the hiring
date and lives in a Federal Renewal Community, Empowerment Zone, or
Enterprise Community (RC/EZ/EC) located in areas of New Haven.
Renewal Community, Empowerment Zone, or Enterprise Community (RC/EZ/EC)
addresses may be verified by accessing the Internet website of "HUD
Locator Services" at
http://egis.hud.gov/egis/cpd/rcezec/ezec_open.htm. You may also
verify an RC/EZ/EC address by calling Community Connections, toll
free, at (800) 998-9999.
- All Round I Enterprise
Communities (ECs) expired on December 31, 2004. Round II ECs are
still in existence, but no tax benefits are available for them.
Summer Youth employee
- An individual who is 16 or 17 years old on the hiring date, who
starts work for the employer during the period of May 1 through
September 15, and who lives in a Federal Enterprise Community,
Empowerment Zone, or Renewal Community (RC/EZ/EC) located in areas
of New Haven.
- All Round I
Enterprise Communities (ECs) expired on December 31, 2004. Round II ECs are still in existence, but no tax benefits are available for
Supplemental Security Income (SSI) recipient or Ticket-to-Work
individual who has received Supplemental Security Income (SSI) for
any month ending within the 60-day period ending on the hiring date,
or a Ticket-to-Work holder* with an individual work plan through an
- An individual who has served on active duty in the U.S. Armed
Forces for more than 180 days or has been discharged with a
service-connected disability, and who is a member of a family
receiving Food Stamps for at least a continuous three-month period
during the 15-month period ending on the hiring date.
Vocational Rehabilitation Referral or Ticket-to-Work holder
- An individual with a physical and/or mental disability which may
present a substantial barrier to employment, and who has received
services under a State rehabilitation plan through the Bureau of
Rehabilitation Services or the Board of Education and Services for
the Blind, an Employment Network as a Ticket-to-Work holder* with an
individual work plan, or has received vocational rehabilitation
through the US Department of Veterans' Affairs.
Ticket-to-Work Program assists disabled Social Security Disability
Insurance (SSDI) and Supplemental Security Income (SSI)
beneficiaries with the training and support they need to go to work
by increasing their choice of employment, vocational rehabilitation
(VR) and other support services from public and private providers
(Employment Networks). The Ticket-to-Work Program
is flexible and voluntary, most disabled Social Security
beneficiaries, age 18-64, receive a ticket (Ticket-holders).
WOTC Tax Facts
on or Before December 31, 2006
maximum WOTC tax credit for each new employee is $2,400 for all
categories except Summer Youth.
you hire a qualified individual in all categories except Summer
Youth, whom you employ for at least 400 or more hours during the
first 12 months, your company may receive a credit of 40% of
up to $6,000 of his or her qualified wages.
you hire a qualified individual whom you employ for at least 120
hours, but fewer than 400 hours during the first 12 months, your
business may receive a tax credit of 25% of up to
$6,000 of his or her qualified wages.
Summer Youth group qualified wages earned from May 1 through
September 15 for an individual are capped at $3,000 for a maximum
tax credit of $1,200.
The Welfare to Work Tax
Credit enabled the employer to earn a Federal tax credit up to $8,500 over a two-year period for each new employee who has
received long-term Temporary Assistance to Needy Families (TANF).
If the qualified individuals
worked for at least 400 hours or 180 days in a 12-month period, you
may receive a credit for 35% of up to $10,000 of their
qualified wages for that year, and 50% of up to $10,000 of
their qualified wages for the second year.
There are no restrictions on
the number of qualified employees you hire for whom you receive a
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