Work Opportunity Tax Credits: What are they & how can they encourage employers to hire me?

Suggest that your employer look into the federal Work Opportunity Tax Credit (WOTC). The WOTC is a federal tax credit historically available to employers for hiring job applicants who face significant barriers to employment, including people with felony convictions who are hired within 1 year after their conviction or release from prison, veterans, and recipients of certain public benefits.[1858] (For this reason, be sure to answer truthfully if an employer or job application asks whether you receive public benefits!) The WOTC ranges from $1,200 to $9,600, depending on your hours and pay during your first year as an employee, and on the maximum allowed credit.[1859] For more information about the WOTC in California, contact the WOTC Coordinator at (916) 227-5163, or visit the Employment Development Department’s (EDD) website about the WOTC at: http://www.edd.ca.gov/jobs_and_training/Work_Opportunity_Tax_Credit.htm.

IMPORTANT: Although the legal authority for the WOTC expired on December 31, 2013, tell your employer that he/she should continue to submit WOTC applications to the EDD. In the past, when the WOTC expired, Congress eventually reauthorized the tax credit and applied it retroactively; so it’s recommended that employers continue to submit applications while reauthorization is pending.[1860]

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  1. 1858

    26 U.S.C. § 51.

  2. 1859

    See 26 U.S.C. § 51; see also U.S. Dep’t of Labor, WOTC Tax Credit Amounts, http://Www.Doleta.Gov/Business/Incentives/Opptax/Benefits.Cfm. Employers may use the “WOTC Calculator” tool available online at: http://www.doleta.gov/business/incentives/opptax/wotcEmployers.cfm.

  3. 1860

    See 26 U.S.C. § 51(d)(13)(A)(ii)(II); see also U.S. Dep’t of Labor, Training and Employment Guidance Letter No. 8-13. In the past, Congress has waived the 28-day timeliness rule for applications that were eligible during the program’s lapse period, but there is no guarantee; see IRS, Work Opportunity Tax Credit Extended, http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Expanded-Work-Opportunity-Tax-Credit-Available-for-Hiring-Qualified-Veterans. To avoid a denial based on timeliness issues, employers should continue to follow the 28-day rule. California’s WOTC Authorization Center is continuing to process all applications, and expects reauthorization. For more information, see Cal. Emp’t Dev’t Dep’t, Employer Guide, http://www.edd.ca.gov/jobs_and_training/WOTC_Employer_Guide.htm.