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Work Opportunity Tax Credit (WOTC)
About the WOTC Program
WOTC is a Federal tax credit available to employers who hire and retain veterans and/or individuals from other target groups with significant barriers to employment. Employers claim about $1 billion in tax credits each year under the WOTC program.
There is no limit on the number of individuals an employer can hire to qualify to claim the tax credit, and there are a few simple steps to follow to apply for WOTC. The tax credit employers can claim depends upon the target group of the individual hired, the wages paid to that individual in the first year of employment, and the number of hours that individual worked. There is also a maximum tax credit that can be earned. For long-term Temporary Assistance for Needy Families (TANF) applicants, credit is available to employers who hire members of this group for up to a two-year period.
- In the first year, the employer may claim a tax credit equal to 40% of the first-year wages, up to the maximum tax credit, if the individual works at least 400 hours.
- In the second year, the employer may claim a tax credit equal to 50% of the second-year wages, up to the maximum tax credit, if the individual works at least 400 hours.
For all other target groups, the credit is available to employers who hire members of these groups, based on the individual's hours worked and wages earned in the first year.
- If the individual works at least 120 hours, the employer may claim a tax credit equal to 25% of the individual's first year wages, up to the maximum tax credit.
- If the individual works at least 400 hours, the employer may claim a tax credit equal to 40% of the individual's first year wages, up to the maximum tax credit.
Veterans & Other Target Groups
- Veterans
- Temporary Assistance for Needy Families (TANF) Recipients
- Supplemental Nutrition Assistance Program recipients (also known as SNAP or food stamps)
- Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
- Vocational Rehabilitation Referral
- Ex-felons
- Supplemental Security Income Recipients
- Summer Youth Employee (living in Empowerment Zones)
- Long Term Unemployed (LTUR)
Online WOTC Applications for TANF, SNAP, and LTUR
IDES has an electronic system to determine eligibility for SNAP, TANF, and LTUR only. Those applications can be submitted electronically at ILWOTC.
- Frequently Asked Questions About Online WOTC Applications
- Client Login
- Submit New Online WOTC Application (Form 8850 + 9061) applies to SNAP, TANF, and LTUR categories only
- Check Your Online WOTC Application Status
Document Submission
Mail completed applications (8850, 9061 or 9062 and all supporting documentation) to:
IDES - WOTC
33 South State Street
10th Floor
Chicago, IL 60603
You may also submit SNAP, TANF and LTUR applications electronically at ILWOTC (instructions).
Please do not send applications via email or fax due to security concerns.
Important Links
- US Dept Of Labor Work Opportunity Tax Credit Information
- All related questions should be sent to the Ask.WOTC@dol.gov e-mail account.
- WOTC Fact Sheet
- Resources and Forms
- Review the IRS Form 8850 Pre-Screening instructions
- Veteran Authorization For Release of Information to the WOTC Program