What are the Work Opportunity Tax Credit and Welfare to Work Programs?
The Work Opportunity Tax Credit (WOTC) and Welfare to Work programs offer employers a federal tax credit for hiring qualified individuals. Under WOTC, employers may claim a credit of 40% of first-year wages up to $6,000 for employees who work at least 400 hours, for a maximum credit of $2,400 per employee. Welfare to Work credit may qualify the employer up to $3,500 the first year and $5,000 for the second year of employment when hiring long-term family assistance recipients. What are the Federal Empowerment Zone and Renewal Communities Credits? The federal government has established Empowerment Zones and Renewal Communities in many areas across the United States. These geographic zones represent economically distressed communities. These tax credits provide businesses with an incentive to hire individuals who live and work in these zones. The credit under the Empowerment Zone can be up to $3,000 per qualified employee per year through 2009, or up to $1,500 for Federal Renewal Communit
