The Work Opportunity Tax Credit (WOTC)
WOTC is a federal income tax benefit administered by the U.S. Department of Labor (DOL) for employers who hire individuals from specified target populations, including veterans. WOTC reduces a business’s federal tax liability, serving as an incentive to select job candidates who may be disadvantaged in their efforts to find employment.
Qualifying for WOTC
Employers are eligible for a tax credit when hiring individuals with specified barriers to employment identified as target groups. TWC will verify for employers which target group applies. Tax credits currently are available for hires in the following categories:
Veterans
| Target Group | Maximum Tax Credit |
|---|---|
| Disabled veterans with a service-connected disability who have been unemployed for at least 6 months | $9,600 |
| Veterans who have been unemployed for at least 6 months | $5,600 |
| Disabled veterans with a service-connected disability | $4,800 |
| Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits | $2,400 |
| Veterans who have been unemployed for at least 4 weeks | $2,400 |
Non-Veterans
| Target Group | Maximum Tax Credit |
|---|---|
| Long-Term Family Assistance recipients who are members of a family that has received Temporary Assistance for Needy Families (TANF) benefits for at least 18 consecutive months | $9,000 |
| TANF recipients | $2,400 |
| Ex-felons | |
| Designated community residents | |
| Vocational rehabilitation referrals | |
| SNAP recipients | |
| Supplemental Security Income recipients | |
| Summer Youth program participants who are 16 to 17 years old, work between May 1 and September 15, and live in an empowerment zone | $1,200 |
