Work Opportunity Tax Credits
Tax Point Advisors National Expertise and Local Touch help you benefit from the Work Opportunity Tax Credit.
The Work Opportunity Tax Credit (WOTC) is a federal incentive available to employers that hire and retain veterans and individuals from other target groups with significant and consistent barriers to employment. The tax credit limit is $9,600 per worker for employers that operate a taxable business. The limit for tax-exempt employers is $6,240 per worker.
- The tax credit can range from 25% to 40% of the wages earned by a new employee in their first year depending upon which target group the employee belongs to.
- If an employee works at least 120 hours, the credit for the employer is 25%. If the employee works at least 400 hours, the credit will reach 40%.
- For the major categories the credit is calculated as percent of the employee’s wages earned after having worked a minimum of 120 hours.
- The Protecting Americans from Tax Hikes (PATH) Act of 2015 retroactively allows eligible employers to claim the Work Opportunity Tax Credit (WOTC) for qualified veterans and all targeted group employee categories that were in effect prior to the enactment of the Act, if the individual began or begins work for the employer after December 31, 2014 and before January 1, 2020.
- The PATH Act also added a new targeted group category to include qualified long-term unemployment recipients.
Tax Point Advisors works with CPA firms and business owners to determine eligibility, document hours worked and coordinate the application process. We understand the eligibility requirements and can help you apply and qualify for this valuable tax credit.
To learn more about specialty tax services from Tax Point Advisors, simply fill out the form on this page and a member of our team will be in touch with you. Or, you may call us at (800) 260-4138 nationwide.