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Tax Credit Programs

alert Breaking News:   

 

 

alert Congress has re-authorized the WOTC program from  January 1, 2015 through December 31, 2019.   There has been an additional target group added -- Long Term Unemployed.     

 

The Work Opportunity Tax Credit (WOTC)

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have faced significant barriers to employment.  The regulations are set by the IRS and the U.S. Department of Labor and are administered by Connecticut Department of Labor (CTDOL).

How Does WOTC Benefit Your Business?

You may receive a tax credit that ranges from $1,200 - $9,600 depending on the target group of the individual hired and this tax incentive: 

·  Could be worth thousands of dollars to your business!

There is no limit on the number of people you can hire under this program!

·  Offers minimal paperwork, but maximum benefits!

·  WOTC is a direct deductionfrom your federal tax liability.

Tax exempt 501c businesses can benefit from a reduced tax credit if they hire a qualified veteran and they qualify under § 501(a) ("qualified tax-exempt organizations"). 

WOTC is a one-time tax credit for hiring and retaining individuals from these target groups:

 

Veterans:

Tax Credit Amount—Up to a maximum of:

Veteran receiving SNAP

$2,400 (1st year only, qualified wages of $6,000)

Disabled Vet receiving compensation for service connected disability

$4,800 (1st year only, qualified wages of $12,000)

Disabled Vet receiving compensation for service connected disability and unemployed for 6 months

$9,600 (1st year only, qualified wages of $24,000)

Unemployed Vet 4 weeks

$2,400 (1st year only, qualified wages of $6,000)

Unemployed Vet 6 months or more

$5,600 (1st year only, qualified wages of $14,000)

Other Categories:

 

Temporary Assistance to Needy Families (TANF) recipient

$2,400 (1st year only, qualified wages of $6,000)

Supplemental Nutritional Assistance Program (SNAP)

$2,400 (1st year only, qualified wages of $6,000)

Ex-Felon

$2,400 (1st year only, qualified wages of $6,000)

Designated Community Residents

$2,400 (1st year only, qualified wages of $6,000)

Vocational Rehabilitation  Referral

$2,400 (1st year only, qualified wages of $6,000)

SSI and Ticket to Work

$2,400 (1st year only, qualified wages of $6,000)

TANF recipient

$2,400 (1st year only, qualified wages of $6,000)

Summer Youth

$1,200 (1st year only, qualified wages of $3,000)

Long Term Family Assistance Recipient

$ 4,000 year one and $5,000 year two (qualified wages of $10,000)

Long Term Unemployment Recipient

$2,400 (1st year only, qualified wages of $6,000)

 

How do I Do I Apply?  

We suggest you place the Form 8850 in your application package to help you identify potential applicants that may qualify you for this tax credit. This also meets the IRS requirement to have the information provided prior to hire. You will complete the second page of the Form 8850 and also both pages of the Form 9061 (with the employee’s assistance) after the offer of work.

WOTC is not allowed for rehires, only new employees and the paperwork has to be postmarked within 28 days of the start work date.

We will be launching a web based system in 2017, so employers will be able to enter applications online, but until that is launched you will need to mail your completed package to:

Connecticut Department of Labor

Attn: WOTC Unit

200 Folly Brook Blvd

Wethersfield, CT 06109 

The completed package will consist of the IRS Form 8850, ETA Form 9061 and the only additional information are for the target groups listed below to complete the application:

·         Veteran—DD214 or separation paperwork from the military

·        Disabled Veteran—DD214 or separation paperwork from the military and proof of receipt of 

     compensation for a service connected disability

·        Designated Community Resident—proof of age and address

·        Vocational Rehabilitative Referral—Authorization of Disclosure—JS-182

·        Long Term Unemployment Recipient -- ETA Form 9175 – not required but may expedite 

We will process the application and provide you a determination if the application is certified for the tax credit.  Once certified, you need to provide this document, the employee’s number of hours worked and wages to your accounting professional.

How is the Tax Credit Determined?  

WORK OPPORTUNITY TAX CREDIT TARGET GROUP ELIGIBILITY

Who Does Not Qualify For The WOTC Tax Credits:

  • Employers not covered by the Federal Unemployment Tax Act (FUTA)
  • Relatives of the employer
  • Individuals rehired by an employer
  • Individuals employed in Federally subsidized on-the-job training positions

* For more information, please visit the USDOL Employment and Training Administration Web Site

Consider adding a Federal Bond when hiring individuals from designated groups. For more information click here.

Or, for the Connecticut Bonding Coordinator, please contact:

Mr. Donatus Ojide, Bonding Coordinator at 860-263-6797

Bonding Service Coordinator

Connecticut Department of Labor

200 Folly Brook Blvd

Wethersfield, CT 06109

860-263-6797

donatus.ojide@ct.gov

 

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