Expanded & Modified Work Opportunity Tax Credit
Employers can claim a credit against income tax of a percentage of first-year wages if they hire employees of specific groups who face employment hindrances. Currently, according to the IRS, ten categories of eligible workers now exist: qualified IV-A Temporary Assistance for Needy Families recipients; unemployed veterans, including disabled veterans; ex-felons; designated community residents living in Empowerment Zones or Rural Renewal Counties; vocational rehabilitation referrals; summer youth employees living in Empowerment Zones; food stamp (SNAP) recipients; Supplemental Security Income recipients; long-term family assistance recipients; and qualified long-term unemployment recipients. Before a worker can claim the credit, Form 8850 must be filed by the employer to request certification within 28 days of the eligible worker’s first day of employment. In addition, tax-exempt organizations can claim the WOTC for hiring qualified veterans. For more information, go to www.irs.gov/businesses/small-businesses-self-employed/work-opportunity-tax-credit or contact one of our accounting professionals at Sink, Gordon & Associates.