Are there any available Federal tax credits to employers for hiring welfare recipients?
Answer — Yes. The Work Opportunity Tax Credit (WOTC), authorized by the Small Business Job Protection Act of 1996, is a Federal tax credit that encourages employers to hire certain job seekers and can reduce employer Federal tax liability by as much as $2100 for each qualified new worker. Welfare recipients who have received Aid to Families with Dependent Children (AFDC) or Temporary Assistance for Needy Families (TANF) assistance for at least a 9-month period, ending during the 9-month period which ends on the hiring date, are eligible for the credit. The existing WOTC expires September 30, 1997, but the Administration has proposed to extend it for one year. The Administration has also proposed an enhancement to the WOTC for long-term welfare recipients that would increase the maximum annual credit to $5000 (claimable for two years) and allow the costs of employer-provided training, health care, and child care to count as wages for purposes of the credit. The Administration has propo
