Employers can reduce their tax liability through two Tax incentive programs, the Work Opportunity Tax Credit (WOTC) and Welfare-To-Work Tax Credit (WtWTC). These two federal income tax credits encourage private sector employers to hire certified eligible individuals from nine different targeted groups of job seekers:

• A member of a family that is receiving or recently received Temporary Assistance to Needy Families (TANF) or Aid to Families with Dependent Children (AFDC),
• An 18-24 year old member of a family that is receiving or recently received Food Stamps,
• An 18-24 year old resident of one of the Federally designated Empowerment Zones (EZs), Enterprise Communities (ECs), or Renewal Communities (RCs),
• A 16-17 year old EZ/EC or RC resident hired between May 1 and September 15 as a Summer Youth Employee,
• A veteran who is a member of a family that is receiving or recently received Food Stamps,
• A disabled person who completed or is completing rehabilitative services from a State or the U.S. Department of Veterans Affairs,
• An ex-offender who is a member of a low income family,
• A recipient of Supplemental Security Income (SSI) benefits, and/or
• The New York Liberty Zone Business Employee (requires no certification).

The WOTC can reduce an employer’s federal tax liability by as much as $2,400.00 per “new” hire, while helping the job seeker most in need of employment opportunities. This program allows eligible job seekers to get on-the-job experience and move them toward economic self-sufficiency.

The WtWTC is an important tool to help people move from welfare to work. The WtWTC encourages employers to hire long-term family assistance recipients. This tax credit can lower the employer’s federal tax liability by as much as $8,500.00 per “new” hire, hired after December 2001 and before January 1, 2004.

To learn more about the Welfare-To-Work Tax Credit (WtWTC), Work Opportunity Tax Credit (WOTC), and other tax credits that can help lower business tax liability and increase America’s productivity and economic growth go to www.doleta.gov or contact your local State Workforce Agency.