Businesses

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit, and it is designed as an incentive for businesses to hire individuals that consistently face significant barriers to employment.

The main objective of this program is to enable the targeted employees to gradually move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers.

Participating employers are compensated through a reduced federal income tax liability. WOTC joins other workforce programs that help incentivize workplace diversity and facilitate access to good jobs for American workers.

DOL Category

Categories of Eligible Veterans

Qualified First-Year Wages Used To Determine Credit
(Maximum Considered)

Hours Worked in First-Year

>= 400 hrs

120 to 399 hrs

Credit is 40% of Qualified First-Year Wages

Credit is 25% of Qualified First-Year Wages

2Ba

Veterans that received food stamps (Supplemental Nutrition Assistance Program, or SNAP) for 3 consecutive months during the 15 months prior to the hire date.

$6,000

$2,400

$1,500

2Bb

Veterans entitled to compensation for a service-connected disability and discharged from the military during the year prior to the hire date.

$12,000

$4,800

$3,000

2Bc

Veterans entitled to compensation for service-connected disability and unemployed for at least 6 months during the year prior to the hire date.

$24,000

$9,600

$6,000

2Bd

Veterans unemployed for at least 4 weeks, and less than 6 months, during the year prior to the hire date.

$6,000

$2,400

$1,500

2Be

Veterans unemployed for at least 6 months during the year prior to the hire date.

$14,000

$5,600

$3,500











DOL Category

Categories of Eligible Non-Veterans

Qualified First-Year Wages Used To Determine Credit
(Maximum Considered)

Hours Worked in First-Year

>= 400 hrs

120 to 399 hrs

Credit is 40% of Qualified First-Year Wages

Credit is 25% of Qualified First-Year Wages

A

Member of a family that received TANF assistance for 9 of the 18 month period ending on the hire date.

$6,000

$2,400

$1,500

C

Convicted of a felony or released from prison after a felony conviction during the year period ending on the hire date.

$6,000

$2,400

$1,500

D

Designated Community Resident age 18 to 39

$6,000

$2,400

$1,500

E

Referred to an employer by a Vocational Rehabilitation Agency, approved the by the state, while on or after completion of an individual employment plan.

$6,000

$2,400

$1,500

F

Qualified Summer Youth age 16 to 17.

$3,000

$1,200

$750

G

Member of a family that received SNAP (Food Stamps) benefits for at least the 6 months period ending on the hire date, OR received SNAP benefits for the 3 out of the 5  months ending on the hire date and are no longer receiving them. Must be age 18 to 39.

$6,000

$2,400

$1,500

H

Received Supplemental Security Income (SSI) benefits for any month ending within 60 days of the hire date.

$6,000

$2,400

$1,500







Long-Term TANF (Category I) is unique and is noted out of sequence




I

Member of a family that received TANF assistance for at least the 18 month period ending on the hire date,

OR received at least 18 months of assistance beginning after August 5, 1997 with the earliest 18-month period ending within 2 years of the hire date,

OR your TANF eligibility ended within two years of the hire date.

Qualified First-Year Wages Used To Determine Credit
(Maximum Considered)

Hours Worked in First-Year

>= 400 hrs

120 to 399 hrs

Credit is 40% of Qualified First-Year Wages

Credit is 25% of Qualified First-Year Wages (capped at $6,000)

$10,000

$4,000

$1,500




Qualified Second-Year Wages Used To Determine Credit
(Maximum Considered)

Hours not addressed in Second-Year

 


Credit is 50% of Qualified Second-Year Wages


$10,000

$5,000



To qualify for the tax credit, the employer must apply for and receive an Employer Certification.  To request certification:
  1. Have the potential new hire complete page one of the Pre-Screening Notice (IRS Form 8850) by the day of job offer. 
  2. If the new employee indicates potential WOTC eligibility on page one of Form 8850, complete page two of this form.
    • Important: There are four date blocks on page two. The date blocks must show that the applicant provided the information (completed the front side of the form 8850) before or on the day the job is offered. Why? Because as an incentive to hire it must be demonstrated the employer learned of the potential WOTC tax credit before the candidate was offered the job.
  3. Have the new hire complete ETA Form 9061 (Individual Characteristics Form) after they start.
  4. If the new employee is a veteran, please include a copy of their DD 214. If they are a disabled veteran, include a copy of their VA letter showing their VA rating (percentage of disability). If you cannot get these documents right away, please include a note letting us know that you will be sending the document soon.
    • Why is this important? If you include the DD 214 or VA letter, we will move your application to the front of the line for processing. However, without those additional documents, it will be necessary for you to have the new employ sign a VA Informed Consent Form so we can request the information from the VA – which is a longer process.
  5. Request certification by following the link to the online WOTC portal and entering the information collected on the 8850 and 9061 within 28 days of the time the applicant starts work.  Using the automated system is easy, will save you time, and has the potential to get your tax credit to you faster.   Note:  If you use the automated system you must retain the 8850, 9061 and any other substantiating documentation for your records per IRS document retention guidelines.
    OR
  6. Request certification by mailing the completed Pre-Screening Notice and Certification Request for the Work Opportunity Credit, Individual Characteristics Form, and any supporting documents within 28 calendar days after the applicant starts work to:

    Oregon Employment Department
    WOTC Unit, Room 201
    875 Union Street NE
    Salem, OR 97311

Due to the high volume of incoming applications, the WOTC Unit is unable to verify receipt of mailed applications by phone.  Use of certified mail or equivalent is recommended for confirming receipt of applications submitted using the US Postal Service. Once mailed applications have been received and keyed by WOTC staff their status can be seen by logging-in to the online WOTC portal.

Important Note:

The timeliness of the request is determined by postmark date or electronic submission date stamp.
Please note that the timely filing provision is part of the eligibility criteria for the tax credit.  The timeliness requirement cannot be waived.   Incomplete applications are not accepted.
If the request is timely and the applicant is eligible, an Employer Certification authorizing the tax credit will be returned to the business.

At the end of the tax year, claim the credit on your WOTC certified employee(s) by completing IRS Form 5884.
 
Filing reminders:
  • Form 8850 (Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be complete with signatures appearing in ink or pencil, or signed electronically.
  • An untimely application will result in the denial of the certification request.
  • Keep copies of the documents mailed and the determination letter received.

Federally subsidized on-the-job training (OJT) programs and the WOTC
For a potential WOTC target group member that is about to begin an On-the-Job Training (OJT) program, mail a completed certification request to the WOTC Unit no later than 28 calendar days after the individual begins the OJT experience.  The OJT start date is treated as the employment start date when determining Employer Certification eligibility.

For specific WOTC information and forms:
Go to our Forms page and filter for WOTC.

Consultants:
To set up a new consultant account CLICK HERE to contact a WOTC representative.

Work Opportunity Tax Credit

Oregon Employment Department
875 Union St. NE Rm. 201
Salem, OR 97311

Hours of Operation

8:00 AM  - 5:00 PM

Contact

Toll Free: (800) 237-3710 ext. 71670