By Jodi Derr
As part of SCPA Works’ on-going efforts to provide valuable resources to both employers and job seekers, we are encouraged to see the recent reauthorization of an important tax credit that incentivizes businesses to hire veterans, job seekers with barriers to employment and the long-term unemployed.
The Workforce Opportunity Tax Credit (WOTC) program is a federal income tax incentive designed to assist veterans and individuals from other target groups who are facing barriers into gainful employment. WOTC was reauthorized as a part of the omnibus spending and tax package signed into law on December 18, 2015. WOTC provides a tax credit equal to 25% or 40% of a new employee’s wages up to the maximum time period and maximum amount for employers who hire and retain specific target groups including unemployed and disabled veterans; recipients of Temporary Assistance for Needy Families (TANF), food stamps and Supplemental Social Security Income (SSI); residents of designated low-income communities; certain ex-offenders and long term job seekers that have been unemployed for 27 or more weeks. The tax credit was made retroactive to January 1, 2015 and will extend through December 31, 2019.
Eligibility Requirements and Maximum Tax Credits
WOTC Tax Credits are available for both veteran and non-veteran target groups. Employers must obtain certification that an employee is included in a targeted group in order to qualify for the tax credit by completing the following for each employee:
- ETA Individual Characteristics Form 9061/9062
- Page 1 of IRS Form 8850 by the day the job offer is made and page 2 after the individual was hired.
Forms should be submitted to the PA Department of Labor & Industry, Tax Credit Services, 651 Boas Street, 12th Floor, Harrisburg, PA 17121-0750 no later than 28 days after the employee’s start date.
Claiming the Tax Credit
To claim the WOTC, the amount should be computed using forms 5884/5884-c and claimed as a general business credit with Form 3800 with your income tax return.
Visit the WOTC web-site for more information on eligibility requirements and how to apply for the tax credit.
How SCPA Works Can Help Employers and Job Seekers
Working together through multiple partnerships within the six PA CareerLink® one stop centers in the South Central region, SCPA Works focuses on developing a workforce that aligns employer needs with job seeker talent. PA CareerLink® specialists can assist employers to fill open positions with targeted job seekers and provide additional training assistance in conjunction with the WOTC. PA CareerLink® specialists can provide job seekers with wide-ranging case management services that include skills analysis, job search services, career consultation, training resources and career placement assistance.
SCPA Works believes that public resources such as the WOTC that leverage private investment will help to create a business-led, demand-driven workforce system that is inclusive of job seekers of all backgrounds. We look forward to utilizing the WOTC to assist businesses in our region to find and retain a talented workforce.