The Work Opportunity Tax Credit (WOTC) is a federally-funded program that reduces the federal tax liability of private-for-profit employers hiring new employees from selected target groups. Individuals in these target groups have consistently had difficulty obtaining employment. Employers hiring qualified applicants may obtain tax relief through the WOTC program. Credit amounts are based upon a percentage of wages paid to, and hours worked by, properly certified employees.
The WOTC is governed by Public Law 111-312; Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The WOTC undergoes changes and extension(s) and modification to target groups as Congress sees fit. Any target group may be discontinued, modified, or placed on hold for reauthorization.
Program Dates: Congressional legislation governs the WOTC that is available to employers on a year-round basis.