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Tax
Credits
Work Opportunity Tax Credit (WOTC)
The Work Opportunity Tax Credits is a federal tax credit that encourages employers to hire eight targeted groups of job seekers by reducing employers' federal income tax liability by as much as $2,400.00 per qualified new worker. The WOTC applies to new hires that begin work for an employer on or after December 31, 2003. The eight targeted groups are as follows:
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A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Children (AFDC).
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An 18-24 year old member of a family that is receiving or recently received Food Stamps.
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An 18-24 year old resident of one of the Federally designated Empowerment Zones (Ezs), Enterprise Communities (Ecs) or Renewal Communities (RCs).
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A 16-17 year old EZ/EC or RC resident hired between May 1 and September 15 as a Summer Youth Employee.
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A veteran who is a member of a family that is receiving or recently received Food Stamps.
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A disabled person who completed or is completing rehabilitative services from a State or the U.S. Department of Veterans Affairs.
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An ex-felon who is a member of a low income family.
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A recipient of Supplemental Security Income (SSI) benefits.
Welfare to Work Tax Credit (WtW)
The Welfare to Work Tax Credit is a federal income tax credit that encourages employers to hire "Long-term TANF Assistance Recipients" who begin to work on or after December 31, 2003. This tax credit can reduce employers' federal tax liability by as much as $8,500.00 per new hire.
The Welfare to Work Tax Credit for new hires employed 400 or more hours or 180 days is 35% of qualified wages for the first year of employment and 50% of the second year. Qualified wages are capped at $10,000.00 per year.
For more information about Tax Credits, please call PA CareerLink Cambria County at (814) 533-2493.