Hiring Benefits
The Small Business and Work Opportunity Tax Act
Federal Tax Credits
Resources
Hiring Benefits
The Small Business and Work Opportunity Tax Act
The Small Business and Work Opportunity Tax Act of 2007 extends the WOTC Tax Credit through August 31, 2011
The WOTC has two purposes:
- To promote the hiring of individuals who qualify as a member of a target group.
- To provide a federal tax credit to employers who hire these individuals.
When an employer hires an individual who meets the criteria for this program, they may be able to claim federal tax credit against wages paid.
Target Groups that Qualify for the WOTC:
Individuals who are in one of the following nine target groups may qualify an employer for the WOTC:
Disability Awareness and NWC Works
People with disabilities represent over 14% of the population and disabilities can be both visible as well as invisible. Many people with disabilities were born with their condition and have adapted well and developed effective techniques to compensate for their condition. Others may have become disabled later in life but have had the opportunity to develop a wide range of desired skills and abilities that match well with the needs of the work world prior to their disability.
- Qualified recipients of Temporary Assistance to Needy Families (TANF).
- Qualified veterans receiving Food Stamps or qualified veterans with a service connected disability who:
- Have a hiring date which is not more than one year after having been discharged or released from active duty OR
- Have aggregate periods of unemployment during the one year period ending on the hiring date that equal or exceed six months.
- Ex-felons hired no later than one year after conviction or release from prison.
- Designated Community Resident – an individual who has attained ages 18 but not 40 on the hiring date who reside in an Empowerment Zone, Renewal Community, or Rural Renewal County.
- Vocational rehabilitation referrals, including Ticket Holders with an individual work plan developed and implemented by an Employment Network.
- Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Community.
- Qualified Food Stamp recipients ages 18 but not 40 on the hiring date.
- Qualified recipients of Supplemental Security Income (SSI).
- Long-term family assistance recipients.
Federal Tax Credit Amounts and Retention Periods
The employee must be retained 400 hours for a 40 percent tax credit on qualified first year wages up to $6,000. For the employee who is retained at least 120 hours but less than 400 hours a 25 percent tax credit is available on qualified first year wages up to $6,000. The qualified summer youth (target group 6) tax credit is based on qualified first year wages up to $3,000. Qualified wages (for disabled veterans only) was increased from $6000 to $12000.
For more information go to: http://www.doleta.gov/business/incentives/opptax/
Resources
Americans with Disabilities Act of 1990
The Office of Disability Employment Policy
Disability Employment 101
Hiring Practices
Job Accommodation Network