1. What is the Veteran Tax Credit (WOTC)?
The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.
WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers.
2. What are the target groups that qualify?
- Unemployed Veterans, including Disabled Veterans
- Temporary Assistance for Needy Families (TANF) recipientsFood stamp (SNAP) recipients
- Designated community residents (living in Empowerment Zones or Rural Renewal Communities)
- Vocational rehabilitation referred individuals
- Supplemental security income recipients
- Summer youth employees (living in Empowerment Zones)
- Qualified long-term unemployment recipient
3. How much are the tax credits worth?
Credits range from $1500 – $9600 depending on the target group a candidate qualifies for. Most Veterans transitioning from the military will qualify for a minimum of $2400. These are credits not deductions which mean they offset money owed to the IRS dollar for dollar.
4. Is there a limit to the number of times a person can qualify for a credit?
No. Provided a newly hired employee still qualifies under one of the provisions of the WOTC program, there is no limit to the number of employers that can benefit from the tax credit.
5. Can a person qualify for multiple credits?
6. What do we do if we identify a new hire is part of a non-veteran target group?
VTC will file with the government agencies for all target groups (both veteran and non-veteran) on your behalf. In fact, we recommend that you run ALL potential new hires through the VTC WOTC surveys and applicant tracking system to ensure you maximize all tax credits available to you. Most companies that have not been filing for tax credits in the past have hired multiple employees that would have qualified the company for tax credits if they had filed within the deadlines.
7. Can I claim tax credits for employees that I have already hired?
Unfortunately, no. The program is restricted to new hires that have completed the survey no later than the day they began work. All paperwork has to be submitted and accepted by the state agency within 28 days of the new hire date. Because we handle all of your paperwork electronically, we are able to ensure you meet the required deadlines.
8. What is the maximum number of WOTC qualified new hires I can claim in a year?
9. What percentage of Veterans qualify for tax credits?
Nearly 100% of Veterans that are transitioning from active duty qualify for a tax credit. The qualifier is: has a Veteran been unemployed for at least 4 weeks during the past 12 months? The answer is almost always yes, as military wages do not count as employment for qualification purposes. Therefore, if a Veteran has not been working part-time somewhere else each week during the previous 12 months, they should qualify. Approximately 250,000 Veterans transition from active duty to the civilian sector each year.
10. Does your program give me access to find qualified Veterans?
Yes. Depending on your subscription level, you can search our database by keyword for qualified Veterans and/or post job requisitions for the Veterans to find you.
11. How do I manage the paperwork needed to file for the credits?
As part of our applicant processing software, we will file all of the paperwork electronically with the appropriate government agencies on your behalf (a 15% contingency fee of the credit will apply).
12. Is there training available for the software?
Yes. Included in your subscription are video tutorials on how to use the software. In addition, our customer service team is here to help.
13. Can I earn tax credits on Veterans I have already hired?
Unfortunately, no. The WOTC program is designed as a “hiring” tax credit to incentivize employers to hire from specific target groups including Veterans. Prospective hires must complete and sign the required paperwork no later than the date of the job offer. That can be the same day as hire, if they coincide with one another. We encourage our clients to include WOTC as part of the the interview process. Veterans in the VTC database have already completed the required paperwork.