News
Work Opportunity Tax Credit Available Through Dec. 31, 2020
Posted 10.28.20
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers that hire individuals from certain “targeted groups” that have consistently faced significant barriers to employment. Initially enacted in 2007, the WOTC was originally set to expire at the end of 2019. On Dec. 20, 2019, however, the WOTC was extended for another year, allowing employers to claim it for employees hired on or after Dec. 31, 2020.
An employer may claim the WOTC for wages paid to these individuals during their first year of employment, as long as they are hired before Dec. 31, 2020, and work at least 120 hours for the employer during that first year. The credit is calculated as:
- 25% of the wages paid to an employee who worked between 120 and 400 hours; or
- 40% for an employee who worked more than 400 hours.
Refer to the below compliance overview for details.