June 23, 2009

Work Opportunity Tax Credit

The Work Opportunity Tax Credit has been expanded to cover additional groups of workers. The amount of the credit varies from group to group, and can be anywhere from $2,400 to $9,000 per year. Employers can generally receive a credit for employing members of the following groups (this is an abbreviated list –for full list of specific requirements please see attached instructions to form 8850):

1. Qualified IV-A recipient: member of a family receiving assistance under part A of title IV of the Social Security Act;

2. Qualified veteran: a member of a family receiving assistance; or entitled to compensation for a service-connected disability;

3. Qualified ex-felon: hired not more than 1 year after the conviction or release from prison;

4. Designated community resident (resident of an empowerment zone, renewal community, or rural renewal county – see attached list);

5. Vocational rehabilitation referral: an individual who has a physical or mental disability who was referred to the employer by a rehabilitation agency approved by the state;

6. Summer youth employee: an individual who is between the ages of 16 and 18, performs services between May 1 and September 15, and lives within an empowerment zone or renewal community

7. Recipient of SNAP benefits (food stamps)

8. SSI recipient: an individual who is receiving supplemental security income benefits under title XVI;

9. Long-term family assistance recipient;

10. Hurricane Katrina employee: A person who, on August 28, 2005, had a main home in the Gulf Opportunity Zone)

11. Unemployed veteran: A veteran who has been discharged from active duty and received unemployment compensation

12. Disconnected youth: an individual between the ages of 16 and 25 who is not attending school, has been unemployed, and does not have a GED certificate.

Procedure for qualification. Within 28 days of start of employment:

A. Obtain from your employee Form ETA 9062, Conditional Certification Form, if he or she received it from a participating agency, or

B. Complete attached Form 9061; AND

C. Have any eligible employee fill out Form 8850 attached and submit to your State’s Workforce Agency (see attached list of Agencies).