What is the Work Opportunity Tax Credit?
The Work Opportunity Tax Credit (W.O.T.C.) is a federal tax credit for for-profit employers to be used as an incentive for employers to hire individuals convicted of a felony and hired within one year after the date of the conviction or release from prison. The tax credit has eight targeted groups: TANF recipients, veterans, ex-felons, high risk youth, summer youth, Food Stamp recipients, SSI recipients, and vocational rehabilitation referrals.
How much can the employer earn:
WOTC can be as much as $ 2,400. It is based on qualified wages paid to the new hire for the first-year of employment. Generally, qualified wages are capped at $ 6,000 The credit is 25% of qualified first-year wages for those employed at least 120 hours and 40% for those employed 400 hours or more.
The reason employers should use this opportunity:
Employers make the hiring decision.
There is no limit to the number of new hires who can qualify the employer for the tax savings.
There is minimal paperwork needed to claim the WOTC.
Colorado Department of Labor and Employment
Tower 11, Suite 400
1515 Arapahoe Street
Denver, CO 80202