The Work Opportunity Tax Credit (WOTC) is a federal program established in 1996 to promote the hiring of individuals from select target groups that face significant barriers to secure employment.

WOTC Target Groups include:

• SNAP Recipients
• TANF Recipients
• Qualified Veterans
• Ex-Felons
• Designated Community Residents
• Vocational-Rehabilitation Referrals
• Supplemental Security Income (SSI) Recipients
• Summer Youth Hires (ages 16-17)
• Qualified Long-Term Unemployed Recipient

WOTC is designed to benefit job candidates and employers, as well as the government.

WOTC-eligible individuals benefit by:

• obtaining gainful employment
• becoming self-reliant
• contributing to society

Employers benefit from WOTC by:

• earning a valuable tax credit used to offset the company’s federal taxes
• gaining an employee that they can further develop
• increasing its talent pool

The government benefits from WOTC by:

• promoting new jobs for those most in need
• saving on government-assistance programs
• contributing to the economy

The amount for the WOTC credit varies by target group, hours worked, and wages earned. The following target groups have a maximum of $2,400 per certified individual:

• TANF Recipients
• SNAP Recipients
• Veterans — members of a household that received SNAP
• Long-Term Unemployed
• SSI Recipients
• Vocational-Rehabilitation Referrals
• Designated Community Residents
• Ex-Felons

Certified Veterans with a service-related disability who have been unemployed at least six months in the past year can earn the employer up to $9,600 per certified individual.

Veterans with a service-related disability and hired within one year of their release date can earn the employer up to $4,800 per certified individual.

Lastly, Summer Youth ages 16-17 who can work  May 1 – September 15 and live in a federally-designed community area can earn employers up to $1,200 per certified individual.

The days of dealing with paper forms and cumbersome and tedious workflows are over, thanks to technology advancements. Walton can help automate and streamline your company’s WOTC program so you can focus on other important aspects of your business. We leverage our advanced platform to integrate with most applicant-tracking, hiring-management, onboarding, and payroll providers to automate the screening. tracking, and reporting aspects of WOTC. Using APIs and other integration options, we deliver the most flexibility based on the platform your company uses to process applicants and new hires. We also offer the flexibility of screening at the time of application or during onboarding, based on your workflow preference. Leveraging our integration with select payroll providers automates the transmission of the critical payroll data used for WOTC using a secure transmission method and meeting all data privacy laws.

To learn how we can help you automate your WOTC, simply contact us.

Most companies elect to outsource WOTC to eliminate having to deal with all the integral parts and complexities of tax credits. Walton takes the time to understand your business upfront and recommend best practices proven to deliver maximum results with ease. When you think about it, the last thing an employer should need to worry about is dealing with the government, so we take that on and deliver upon our commitments, every time.

The following is a general description of the compliance elements and guidelines that employers must adhere to in order to pursue, earn, and claim WOTC.

Pre-screening of New Hires

• Employers must pre-screen new hires, using IRS Form 8850 on or before the date of the job offer.
• Form 8850 must be signed (or electronically signed and filed) with the State Workforce Agency no later than 28 days from the employee’s start date.

Certification

• The employee must be certified as a member of a WOTC Target Group by the State Workforce Agency.

Retention and Wages

• Certified employees must work a minimum of 120 hours within their first year of employment.
• WOTC is calculated based on the employee’s hours worked and wages earned.

Claiming WOTC

• Employers must claim WOTC when they file their taxes, using IRS Form 5884.

Walton has several pricing structures, based on your company’s needs and size. The most common option is our contingency-fee structure, whereby Walton charges a percentage of the tax credits reported. Alternatively, for select companies, we offer a fixed-rate based on annual hires or certifications obtained. For enterprise-level companies, we offer a subscription-based fee as an additional option, where you pay a software subscription annual fee.

Be sure to contact us to learn more and determine which option best meets your needs.