The Work Opportunity Tax Credit (WOTC) allows for-profit employers of any size to reduce their federal tax liability by up to $9,600 per new hire by hiring people who have consistently faced significant barriers to employment. 501(c)(3) nonprofit organizations who hire veterans are also eligible for WOTC. The WOTC applies only for new employees who have never previously worked for the employer.
Here are the basics:
- For-profit employers of any size may apply for the WOTC
- 501(c)(3) nonprofit employers may apply for the WOTC for the veteran target groups only
- Any type of job is acceptable, including temporary, seasonal, part-time or full-time work
- There is no limit to the number of new hires an employer may claim for the WOTC
- Relatives and dependents of majority business owners do not qualify as WOTC hires
- Self-employed individuals do not qualify as WOTC hires
- WOTC is currently authorized through December 31, 2025
See detailed information about eligible employees and how to apply for the WOTC. (The newly approved ETA Form 9061 [Expiration Date: March 31, 2026] is now available for use. The expired ETA Form 9061 [Expiration Date: March 31, 2023] can still be used through September 30, 2023. Minnesota's online application site is not programmed to accept the new ETA Form 9061 at this time. If submitting the updated form, please submit the application via mail, fax, or email.)
You can also use the WOTC Quick Reference Employer Guide to provide you with key details. Additionally, the Internal Revenue Service published a WOTC Frequently Asked Questions (FAQ) sheet, which is available on irs.gov.
Talk with a CareerForce specialist to learn more.