What is WOTC?

Person on couch with laptop wotc

If your employer participates in the federal government’s Work Opportunity Tax Credit (WOTC) program, you should know more about what that means. 

The WOTC is a federal tax credit available to businesses that hire people from certain groups facing challenges gaining employment. This program incentivizes employers to promote job access to a diverse range of candidates. Your eligibility is determined after completing a WOTC questionnaire while onboarding or by using Form 8850

Simply put, WOTC is a financial incentive to companies for hiring people who might have trouble finding a job. Companies that participate in this program are actively working toward a more equitable workplace. 

Newly hired employees from the following groups are eligible:

  • Qualified IV-A recipient
  • Qualified veteran
  • Ex-felon
  • Designated community resident (DCR)
  • Vocational rehabilitation referral
  • Summer youth employee
  • Supplemental nutrition assistance program (SNAP) recipient
  • Supplemental security income (SSI) recipient
  • Long-term family assistance recipient
  • Qualified long-term unemployment recipient

For all employees, the WOTC survey is optional and is not required to complete onboarding. Your employer will use the information you share to complete federal and state tax returns and in no way will impact your employment. 

Questions? Nextep experts are here to help! Contact us online or at 888-811-5150.

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