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 following forms:
- Pre-Screening Notice and Certification Request - IRS Form 8850 (Instructions for Form 8850)
- Individual Characteristics Form, U.S. Department of Labor - ETA Form 9061
- ETA WOTC Handbook No. 408 Third Edition, November 2002
- IRS Form 8850
- Form 8850 Instructions
- ETA Form 9061
- ETA Form 9175
- WOTC Brochure
- Fact Sheet
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, Washington, D.C, Robin Ehrenberg at 1-202-622-6080
Information on Colorado Works Program Credit; this program is not related to WOTC, it is administered by the Colorado Department of Revenue, contact Richard Giardini firstname.lastname@example.org or 303-856-3900.