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Work Opportunity Tax Credit (WOTC)

Updated online information from the IRS on prescreening job applicants is intended to help determine if hiring them would enable an employer to receive the federal Work Opportunity Tax Credit (WOTC), which is available to employers that hire designated categories of workers who face significant barriers to employment.

For employers facing a tight job market, the WOTC may help by offsetting some of the compensation costs associated with a new hire. "Those having a hard time finding employees for basic tasks and labor may want to keep the WOTC in mind," tweeted online training firm Overnight Accountant following the announcement from the IRS on Sept. 19.

The WOTC was first created as part of the Small Business Job Protection Act of 1996 and has been extended on a regular basis. In 2021, Congress authorized an extension of the WOTC until Dec. 31, 2025.

IRS Update Clarifies Prescreening Process of New Hires for Work Opportunity Tax Credit
SHRM | Sep 2022

How Can Employers Best Use the Work Opportunity Tax Credit?
SHRM | Oct 2022

Work Opportunity Tax Credits Can Increase Diversity and Reduce Labor Shortages
Krieg Devault | Aug 2022

Small Business Alert: Take Advantage of the WOTC for New Hires
GRF CPAs | Jul 2022

WOTC Services
SHRM Vendor Directory

Government Resources

IRS updates Information on tax credit helping businesses to hire certain categories of workers
Work Opportunity Tax Credit
IRS WOTC Home Page

Work Opportunity Tax Credit Fact Sheet
State WOTC Coordinators

EEOC Says Anti-Bias Laws Don't Block Employers from Using WOTC
Federal Work Opportunity Tax Credit Form 8850
EEOC Opinion Letter | Apr 2020

The Work Opportunity Tax Credit
Congressional Research Service | Sep 2018

About Some of the Targeted Groups

Military Veterans

Employing Military Veterans
SHRM Toolkit

People with Disabilities

What are some common myths about hiring people with disabilities that impede disability recruiting initiatives?
Where can employers find qualified applicants with disabilities?
How can HR help introduce more people with disabilities into the workforce?

People with Criminal Histories

Employing Individuals with Criminal Records
SHRM Toolkit

Getting Talent Back to Work
SHRM Toolkit

Long-Term Unemployed

It's Time to Hire the Long-Term Unemployed
Inc. (limited free articles) | Feb 2021

What Is Long-Term Unemployment?
The Balance | Sep 2022



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