Work Opportunity Tax Credit (WOTC)

At the last meeting, the Partnership provided a list of tax credits and reimbursements which manufacturers can use to lower their tax burden as they obtain new talent. One of these programs is the Work Opportunity Tax Credit, a program developed by the US Department of Labor, and managed by each state. There are several groups of people in the job pool for whom the employer may apply for WOTC, among them are unemployed veterans

The Partnership continuously looks for ways for East Bay manufacturers to take advantage of such programs, all in an effort to widen the talent pipeline.  In the case of WOTC, Swords to Plowshares and other groups are helping to highlight such opportunities in order to accelerate the employment of veterans into the skilled trades.  

Please take a 5 minutes to watch this YouTube video, which offers a concise explanation of WOTC.

Important points regarding WOTC 

  1. WOTC helps targeted workers move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers, while participating employers are able to reduce their income tax liability.
  2. WOTC can be added to an organization's tool kit for serving businesses. The tax credit can allow business customers to reduce their federal income tax liability between $2,400 and $9,600 per employee hired, per year.
  3. Qualified job seekers include veterans, TANF recipients, SNAP (Food Stamp) recipients, Vocational Rehabilitation participants, ex-offenders, SSI recipients, and individuals who live in Empowerment Zones or Rural Renewal Counties.
  4. Use the WOTC Calculator to see how much your business can earn in tax credits.

ACCEPTABLE SOURCES OF DOCUMENTATION

The National Archives at http://www.archives.gov/veterans can be used to verify Veteran status. This federal site allows access to separation letters or discharge papers (DD Form 214) that confirm a veteran’s military service. 

Veterans Target Groups

Taken from the DOL website, A new hire qualifies for a veterans target group, if the individual is a:

1. Veteran who is a member of a family that received SNAP benefits (food stamps) for at least a 3-month period during the 15-month period ending on the hiring date.
OR
2. Disabled veteran entitled to compensation for a service-connected disability, who has been

a.  Hired within 1 year of discharge or release from active duty
OR
b.  Unemployed for at least 6 months in the year ending on the hiring date;

OR
3. A veteran who has been unemployed for

a.  At least 4 weeks in the year ending on the hiring date.
OR
b.  At least [sic] 6 months in the year ending on the hiring date. --seeking clarification... 


References and websites

Work Opportunity Tax Credit - Workforce and Community ... 2012. 3 Dec. 2015 

FAQs - Employment & Training Administration. 2015. 3 Dec. 2015 

Work Opportunity Tax Credit - Eligible New Hires ... 2010. 3 Dec. 2015 

Veterans Affairs Info on Special Employers Incentives 

DOL Business Incentive FAQs

CALIFORNIA WOTC Contact:

Rick Helmer
California Employment Development Department
Attn: WOTC Authorization Center
2901 50th Street
Sacramento, CA 95817-2399
Phone: 916-227-5163
Fax: 916-227-5140
Email: Rick.Helmer@EDD.ca.gov
California WOTC webpage

Thanks to Swords to Plowshares for contributing to this post