Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal tax credit that encourages employers to hire targeted groups of job seekers. WOTC can reduce employer federal tax liability by as much as $2,400 to $9, 600 per new hire.
The targeted groups are Category A: Welfare Recipients, Category B-1: Veterans Receiving Food Stamps, Category B-2: Disabled Veterans, Category C: Ex-Felons, Category D: Designated Community Residents, Category E: Vocational Rehabilitation Recipients, Category G: Food Stamp Recipients, Category H: Supplemental Security Income Recipients, Category I: Long Term TANF Recipients, Category V: Unemployed Veterans. Each target group has its own specific requirements.
For more details view the ETA WOTC Handbook No. 408 Third Edition (page II-1 Target Groups At-A-Glance).
You must apply for and receive certification from the Colorado Department of Labor and Employment WOTC Unit, verifying that any new hire is a member of a WOTC target group before you can claim WOTC on the federal tax return. This must be done within 28 days of the new hire’s start date.
Or complete the IRS Form 8850 and ETA Form 9061 located in the resources section below.
- ETA WOTC Handbook No. 408 Third Edition, November 2002
- IRS Form 8850
- Form 8850 Instructions
- ETA Form 9061
- ETA Form 9175 (self-attestation form)
- POA Form 2848
- WOTC Brochure
- Fact Sheet
Work Opportunity Tax Credit/Foreign Labor Certification/Federal Bonding Coordinator
Business Solutions Manager
Colorado Department of Labor & Employment, WOTC Unit
633 17th Street, Suite 700, Denver, CO 80202-3927
Tax related questions should be directed to IRS information number 1-800-829-1040.