The Work Opportunity Tax Credit is a federal tax credit
used to reduce the federal tax liability of private-for-profit
employers. Employers can hire from 8 different targeted
groups:
WOTC and WTW Qualified TANF
Recipients
Qualified Veteran
Qualified Ex-Felon
High Risk Youth Vocational
Rehabilitation Referral
Qualified Summer Youth
Qualified Food Stamp Recipient
Qualified SSI Recipient
The maximum credit available is $2,400 per eligible worker
for the adult target groups. The credit is based on 40%
of up to $6,000 in qualified wages during the first year
of employment. Summer youth qualifies for 40% of the first
$3,000 in wages during the required working period.
Long-term family assistance recipients who begin work after
December 31, 1997, and before January 1, 2004, can earn
their employers up to $8,500 in the Welfare-to-Work Tax
Credit if they
are members of a family:
That received TANF for at
least 18 consecutive months
before the hire date or...
Whose TANF eligibility expired
under federal or state law
after August 5, 1997 or...
That received TANF for a total
of at least 18 months,
beginning after August 5, 1997
The maximum credit for new hires employed for 400 or more
hours or 180 days is 35% of qualified wages for the first
year of employment and 50% for the second year; qualified
wages are capped at $10,000 per year.
For more information about the Work Opportunity Tax Credit
& Welfare-to-Work Tax Credit, visit the website below:
http://www.arkansas.gov/esd/foremployer/A_wotc.htm
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