Don’t Forget About the Work Opportunity Tax Credit
礼貌的 杨 & 杨
Are you a business owner thinking about hiring? Be aware that a recent law extended a credit for hiring individuals from one or more targeted groups. Employers can qualify for a tax credit known as the Work Opportunity Tax Credit (WOTC) that’s worth as much as $2,400 for each eligible employee ($4,800, $5,600年和9美元,600 for certain veterans and $9,000 for “long-term family assistance recipients”). The credit is generally limited to eligible employees who began work for the employer before January 1, 2026.
一般, an employer is eligible for the credit only for qualified wages paid to members of a targeted group. 这些组织包括:
- Qualified members of families receiving assistance under the Temporary Assistance for Needy Families (TANF) program,
- Qualified ex-felons,
- Designated community residents,
- Vocational rehabilitation referrals,
- Qualified summer youth employees,
- Qualified members of families in the Supplemental Nutritional Assistance Program (SNAP),
- Qualified Supplemental Security Income recipients,
- Long-term family assistance recipients, and
- Long-term unemployed individuals – unemployed for more than 27 weeks
You must meet certain requirements
There are a number of requirements to qualify for the credit. 例如, 为每一个员工, there’s also a minimum requirement that the employee must have completed at least 120 hours of service for the employer. 也, the credit isn’t available for certain employees who are related to or who previously worked for the employer.
There are different rules and credit amounts for certain employees. The maximum credit available for the first-year wages is $2,400 为每一个员工, $4,000 for long-term family assistance recipients, 和4美元,800, $5,600 or $9,600 for certain veterans. 另外, for long-term family assistance recipients, there’s a 50% credit for up to $10,000 of second-year wages, resulting in a total maximum credit, 在两年内, of $9,000.
For summer youth employees, the wages must be paid for services performed during any 90-day period between May 1 and September 15. The maximum WOTC credit available for summer youth employees is $1,200 per employee.
The employer must obtain certification that an individual is a member of the targeted group by filing 8850年, Pre-Screening Notice and Certification Request with the Michigan Unemployment Insurance Agency within 28 days after the eligible worker begins work. After hiring the job seeker, the employer must complete the U.S. Department of Labor’s 埃塔形式9061 – Individual Characteristics Form.
Certification deadline extended
On August 11, the IRS issued 注意2021 - 43 which extends the 28-day deadline by which employers must request certification of employees hired between January 1 and October 8 of this year who are members of the Designated Community Resident or Qualified Summer Youth Employee targeted groups. Certain employers now have until November 8, 2021, to submit required certification requests. To be certified as a Designated Community Resident or a Qualified Summer Youth Employee under the WOTC, an employee must have a principal place of residence within an Empowerment Zone where the employee continuously resides.
There are additional rules and requirements. In some cases, employers may elect not to claim the WOTC. And in limited circumstances, the rules may prohibit the credit or require an allocation of it. However, for most employers hiring from targeted groups, the credit can be valuable.
Read more about the WOTC:
- Targeted groups and the Michigan Department of Labor requirements
- Unemployment Insurance Agency’s WOTC简报
- 国税局的指导 为WOTC