The Work Opportunity Tax Credit applies only to new employees hired after December 31, 2005 and before the legislative ending date of January 1, 2008.
The new employee must belong to one of the nine target groups listed below:
A. IV-A (TANF) Recipient - A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF), or benefits under a successor program for any 9 months during the 18-month period ending on the hire date. Ohio WOTC is currently able to verify this information.
B. Veteran - A veteran is a member of a family that is receiving Food Stamp assistance for, at least, a 3-month period within the last 15 months ending on the hire date and has served on active duty in the Armed Forces of the United States for a period of more than 180 days, or was discharged or released from active duty in the Armed Forces of the United States for a service-connected disability, and has a hiring date which is not more than 1 year after having been discharged or released from active duty in the Armed Forces of the United States; or Having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months. Ohio WOTC can verify Food Stamp benefits and proof of Veteran status.
C. Ex-Felon - An ex-felon is an individual who has been convicted of a felony under any statute of the United States or any state; and has a hire date which is not more than one (1) year after the last date on which the applicant was so convicted or was released from prison.
We can access information for individuals who have been sentenced to a prison term as a result of a felony conviction by a county judge in Ohio through a database feed from the Department of Rehabilitation & Corrections. Information regarding felony offense convictions for individuals who were sentenced to probation must be obtained via the city, county or federal criminal justice system under which the sentence was imposed. If the felony conviction was committed in a state other than Ohio, the individual/employer will be required to submit appropriate documentation of that conviction, including the date of conviction/release.
For information on Federal Bonding, please contact the Department of Rehabilitation and Correction's Bureau of Quality & Community Partnerships at (614) 728-1534.
D. Designated Community Residents (DCRs)- An individual that is age 18 but not yet 40 years old on the hire date who is a resident of one of the federally designated Empowerment Zone (EZ), Enterprise Communities (EC) or Renewal Communities (RC), or a Rural Renewal County (RRC) (Crawford, Monroe, Paulding, Seneca and VanWert Counties) . The Empowerment Zone/Enterprise Community/Renewal Community website is: http://egis.hud.gov.
Ohio WOTC can verify whether or not the applicant's address is in an Empowerment Zone, Enterprise Community or Renewal Community at this site. You must provide: 1)Proof of Age - a copy of the employee's driver's license, birth certificate or an IRS W-4 if age is on the W-4, and 2)Proof of Address - a copy of the IRS W-4, utility bill or similar mailing, showing an address in an Empowerment Zone, Enterprise Community or Renewal Community. Note: The address on the IRS 8850 and the proof of address documentation must match.
E. Vocational Rehabilitation Referral - Applicant has a physical or mental disability which results in a substantial handicap to employment; and was referred to the employer upon completion of, or while receiving, rehabilitative services pursuant to an individualized written plan of employment (IWPE) under a state plan for vocational rehabilitation services; or a "ticket holder" under the Ticket to Work Program who has an Individual Work Plan (IWP) developed and implemented by an Employment Network (EN) pursuant to subsection (g) of section 1148 of the SSA with respect to which the requirements of such subsection are met. Ohio WOTC is currently able to verify this information.
F. Summer Youth- Age 16 but not yet 18 years old on hire date. EZ, EC or RC resident hired between May 1st and September 15th as a Summer Youth employee. For Designated Community Residents and Summer Youth, you must provide: 1)Proof of Age - a copy of the employee's driver's license, birth certificate or an IRS W-4 if age is on the W-4, and 2)Proof of Address - a copy of the IRS W-4, utility bill or similar mailing, showing an address in an Empowerment Zone, Enterprise Community or Renewal Community. Note: The address on the IRS 8850 and the proof of address documentation must match. Ohio WOTC can verify whether or not the applicant's address is in an Empowerment Zone, Enterprise Community or Renewal Community.
G. Food Stamp Recipient - A member of a family that is receiving or recently received Food Stamps, and is at least 18, but not yet 40 years old, on the hire date. Individual is a member of a family receiving assistance under a food stamp program for the 6-month period ending on the hire date; or receiving such assistance for at least 3 months of the 5-month period ending on the hire date, (in the case of an able-bodied adult without dependents who ceases to be eligible for food stamps under the work requirements of Section 6(o) of the Food Stamp Act of 1977). Ohio WOTC is currently able to verify this information.
H. Supplemental Security Income (SSI) Recipient - An individual receiving Supplemental Security Income (SSI) benefits for any month ending within the 60 day period ending on the hire date.
I. Long-Term IV-A Assistance Recipient - An individual who is a member of a family that received Temporary Assistance to Needy Families (TANF) or benefits under a successor program for at least 18 consecutive months ending on the hire date; or has received family assistance for a total of at least 18 months (whether or not consecutive) beginning after August 5, 1997 and has a hire date that is not more than two (2) years after the end of the earliest 18-month period; or whose TANF eligibility expired under a federal or state law after August 5, 1997, and who was hired within two years after their eligibility expired. Ohio WOTC is currently able to verify this information.
All certification notices will denote which target group the individual was certified for by listing the corresponding alphabetic letter (A through I) for that target group as noted above.
Benefits to Employers: Employees who work at least 120 hours but less than 400 hours will entitle the employer to a tax credit of 25% of the first-year qualified wages up to $6,000, for a maximum credit of $1,500. Summer Youth must work at least 90 days between May 1st and September 15th. Employers may claim a credit of 40% of first-year wages up to $6,000, for new employees who work at least 400 hours, for a maximum credit of $2,400 per employee.
The tax credit for the Long Term IV-A Assistance Recipient target group can be taken over two years. If the employee works 400 hours or more, they may qualify the employer for 40% of the first year's wages up to $10,000 which is $4,000 for the first year and 50% of the second year's wages up to $10,000 which is $5,000 the second year.
Ineligible For The WOTC Tax Credits:
- Employers not covered by FUTA
- Relatives of the employer
- Non-qualifying rehires
- Federally subsidized on-the-job training positions
- Hired employee not a member of a target group