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What is the Work Opportunity Tax Credit? FAQ

Posted on by iRecruit

The Work Opportunity Tax Credit (WOTC) is a federal tax credit in the United States designed to incentivize employers to hire employees from certain target groups who have faced significant barriers to employment, such as veterans, individuals on public assistance, and ex-felons.

The WOTC credit is available to eligible employers who hire individuals from these ten target groups and who meet certain requirements. The amount of the credit is based on a percentage of the first-year wages paid to the eligible employee, with a maximum credit available per employee.

How Much Is the WOTC Tax Credit Worth?

WOTC Target Groups

WOTC is worth approximately $5 Billion to employers every year. The average tax credit is around $2,400 and around 10-15% of new hires may be eligible. When hiring eligible qualified veterans the tax credit can be up to $9,600.

Does WOTC Expire?

WOTC is currently authorized through December 31, 2025 (Section 113 of Division EE of P.L. 116-260 — Consolidated Appropriations Act, 2021).

What happens after that date? WOTC is typically renewed by Congress at the end of the expiry year. In the case where it is not renewed on time, historically, it has been renewed retroactively. Therefore, even if the program was officially expired, employers are encouraged to continue screening in order not to miss out on any potential tax credits.

How iRecruit Can Help!

WOTC Screening can be included in iRecruit, as part of the application process, or in iConnect, as part of your new hire (online) paperwork. iRecruit improved its WOTC integration to make this easier for our customers.

CMS, the publisher of iRecruit, has been providing WOTC screening services for over 25 years and are experts in this field.

Questions about implementing WOTC Screening with iRecruit? Set Up a Time To Speak With Us, Or Request More Information

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