What is WOTC?
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who invest in American job seekers who have consistently faced barriers to employment. Employers may meet their business needs and claim a tax credit if they hire an individual who is in a WOTC targeted group.
Employers must apply for and receive a certification verifying the new hire is a member of a targeted group before they can claim the tax credit. After the required certification is secured, taxable employers claim the WOTC as a general business credit against their income taxes, and tax-exempt employers claim the WOTC against their payroll taxes.
WOTC is authorized until December 31, 2025 (Section 113 of Division EE of P.L. 116-260 -- Consolidated Appropriations Act, 2021).
WOTC Fact Sheet
Learn more about the WOTC and what it means for workers and employers in our WOTC Fact Sheet.
A quick reference guide for employers
Learn more about how the WOTC benefits employers and how to start utilizing it in our WOTC Quick Reference Guide for Employers.
Follow these 3 steps to take advantage of the WOTC
As our economy continues to recover, employers around the country are creating new jobs and seeking workers to fill vacant roles. Interested in taking advantage of the WOTC for your new hires? Follow these three steps.
WOTC targeted groups
For additional information about WOTC and a full list of eligible targeted groups, visit the IRS WOTC webpage.
- Empowerment Zone Tax Incentives
The Department of the Treasury and the Internal Revenue Service (IRS) issued IRS Notice 2021-43, Work Opportunity Tax Credit (WOTC) Transition Relief under Internal Revenue Code §51, effective August 10, 2021. This notice provides transition relief by extending the 28-day deadline for employers to submit a certification request for an individual who begins work on or after January 1, 2021, and before October 9, 2021, and is a member of the Designated Community Resident targeted group or the Qualified Summer Youth Employee targeted group, and resides within an empowerment zone.