Tax Credit Programs

Program Updates:   

The U.S. Department of Labor’s Training and Employment Guidance Letter (TEGL) 16-20, Change 1, provides updated WOTC Procedural Guidance effective February 20, 2024. Connecticut Department of Labor WOTC implementation policies and details about WOTC targeted groups that require supporting documentation may be found here.

Congress has re-authorized the WOTC program from January 1, 2021 through December 31, 2025.

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 deduction from 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:

How do I Do I Apply?  

A WOTC application package consists of IRS Form 8850 and ETA Form 9061 with additional documents needed for the groups listed below:

• 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 Rehabilitation Referral—Authorization of Disclosure—JS-182

• Long Term Unemployment Recipient-- ETA Form 9175

The Connecticut Department of Labor now has an online WOTC processing system that provides for the automated determination of some target groups. Employers may visit www.cthires.com to create a WOTC account that will allow for the submission of their applications by bulk upload or manual entry.

The required federal forms are generated when using CTHires but may also may be also accessed from the United States Department of Labor’s website. If you do not have access to a computer you can mail the completed package to:

WOTC is allowed for first-time hires only – not rehires – and the paperwork has to be postmarked or electronically submitted within 28 days of the start-work date. 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.

In response to your submitted certification request, the Connecticut Department of Labor will provide a determination letter that either certifies or denies the tax credit. Employers with CTHires accounts may access these determinations online. For their certified new hires, employers will provide the letter, number of hours worked by the employee, and their wages to their accounting professional.How is the Tax Credit Determined?  

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

Contact CTDOL's WOTC program via email at DOL.WOTC@ct.gov.