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For additional information about a specific permit, license, tax, or incentive,
please call 311 and ask for the issuing Agency.
For assistance using NYC Business Express, visit our Help page,
email us, or call 311 and ask for NYC Business Express.
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Work Opportunity Tax Credit |
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| Labor, U.S. Department of |
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The Work Opportunity Tax Credit (WOTC) provides a federal tax credit incentive of up to $9,000 for employers who hire members of target groups.
An employer may qualify for the WOTC by hiring individuals from the following nine target groups:
1. Qualified recipients of Temporary Assistance to Needy Families (TANF).
2. Qualified veterans receiving Food Stamps or with a service connected disability who:
a. Have a hiring date which is not more than one year after having been discharged or released from active duty, OR
b. Have aggregate periods of unemployment during the one year period ending on the hiring date that equals or exceed six months.
3. Ex-felons hired no later than one year after conviction or release from prison.
4. Designated Community Resident – individuals ages 18 through 39 who reside in an Empowerment Zone, Renewal Community, or Rural Renewal County.
5. Vocational rehabilitation referrals.
6. Qualified summer youth ages 16 through 17 who reside in an Empowerment Zone, Enterprise Community, or Renewal Community.
7. Qualified Food Stamp recipients aged 18 through 39.
8. Qualified recipients of Supplemental Security Income (SSI).
9. Long-term family assistance recipients.
For additional details on eligibility, see the New York State Department of Labor website (under Links to Additional Materials below).
Federal tax credit amount and retention periods vary by target group; for details consult the Additional Notes section below.
Employers may claim the Work Opportunity Tax Credit for the first 12 months of employment (this may cover two tax years). Any unused portion may be carried back one year and/or forward on future tax returns for 20 years or until all the credit is used, whichever comes first. |
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1.
To determine if an applicant is a member of one or more of the nine target groups, employers must complete and sign the Pre-Screening Notice and Certification Request for the Work Opportunity Tax Credit (Form 8850), available under Links to Application Materials above. Both the employer and the job applicant must sign this form and submit it to the New York State Department of Labor at the address provided under Contact Information below. This form must be submitted within 28 days of the start date of the job applicant. DO NOT SUBMIT FORM 8850 DIRECTLY TO THE IRS.
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2.
Employers must complete and sign the Individual Characteristics Form, ETA 9061 (see Links to Application Materials above). ETA 9061 must be attached and submitted with Form 8850.
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3.
Once Forms 8850 and 9061 have been filed with the New York State Department of Labor, the State will issue the employer a certificate stating that the employee is a member of a target group. If the request is denied the State will provide a written explanation of the denial.
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| No online process available |
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1.
Once an employer has received certification for a given employee, s/he must file the Work Opportunity Credit (Form 5584) with their tax return.
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Federal tax credit amounts and retention periods for target groups 1 through 8 (as presented in the Description of Topic section, above) are as follows:
The employee must be retained 400 hours to receive a 40 percent tax credit on qualified first year wages up to $6,000 (this was increased to $12,000 for disabled veterans only).
For the employee that is retained at least 120 hours but less than 400 hours, a 25 percent tax credit is available on qualified first year wages up to $6,000.
For qualified summer youth (target group 6), the tax credit is based on qualified first year wages up to $3,000.
For those receiving Long-Term Family Assistance (target group 9), the WOTC provides for a tax credit of 40 percent on qualified first year wages up to $10,000 and 50 percent on the second year of qualified wages up to $10,000. For employees retained at least 120 hours but less than 400 hours, a 25 percent tax credit is available on qualified first year wages up to $10,000.
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This page provides general information only. The information does not address all relevant regulatory requirements of City, State or Federal Agencies, nor does it address requirements with which the business must comply on an ongoing basis. It is the business owner's responsibility to meet all City, State and Federal requirements. Failure to comply with all applicable laws and regulations may result in fines or in the suspension and/or revocation of licenses or permits, or other penalties as allowed by law.
Please note that this information is not legal advice; you can only obtain legal advice from a lawyer. For more information or assistance, please contact the issuing Agency, using the contact information above, or call 311 (or 212-NEW-YORK if outside of New York City).
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