WOTC · Data-Driven
WOTC success relies on precise data collection, which varies across businesses. We tailor survey and payroll solutions to each client's hiring process, from QR code surveys to custom software integrations, across all 50 states.
Our Approach
Mobile-friendly eligibility surveys new hires complete in minutes.
Built into your ATS, onboarding, and payroll systems.
Hours and wages tracked automatically to calculate credits.
Timely state submissions and document retention across all 50 states.
Overview
The Work Opportunity Tax Credit is the fourth-largest federal tax credit program, designed to stimulate job creation and economic growth. By reducing hiring costs, WOTC encourages businesses to expand their workforce while supporting broader workforce participation.
Employers certify that new employees meet eligibility criteria through Form 8850, submitted to the appropriate state workforce agency within the designated timeframe. The credit applies to current-year tax liability, with unused portions available for carryforward in certain cases.
IRS Form 8850 serves as a pre-screening notice, while DOL Forms 9061 and 9062 provide additional details on an employee's background. These forms must be retained to substantiate claims if requested by the IRS or state agencies.
Each of the 50 states has its own processing methods, verification steps, and documentation requirements. Keeping up with shifting state-specific procedures is essential, as missteps can impact your ability to claim the credit.
WOTC is tied to employment records, requiring employers to capture eligibility data without disrupting hiring workflows. Timely movement of information from screening to certification demands a structured approach, which is exactly what our integrations provide.
Nonprofit employers can claim the Work Opportunity Credit as a payroll tax offset for wages paid to qualified veterans, lowering their share of Social Security taxes. Claims are filed on IRS Form 5884-C.
While screening for WOTC, we can identify other incentives such as state workforce credits like the New York Youth Jobs Program, or federal Empowerment Zone credits, so you capture every available benefit.
Estimator
Estimated annual credit
$47,200to$59,000
Get a precise assessmentIllustrative estimate only. Actual credits depend on facts, elections, and prior-year history.
History
1996
The Small Business Job Protection Act introduced WOTC to incentivize hiring individuals from disadvantaged backgrounds.
1997–2002
The Welfare-to-Work credit and SSI recipients were added, with refined eligibility for veterans.
2006
The Welfare-to-Work credit merged into WOTC, simplifying administration.
2009
Unemployed veterans and disconnected youth became new target groups.
2011
Higher credit amounts for hiring long-term unemployed veterans.
2015
Extended WOTC and introduced electronic filing options to streamline certification.
2023
New procedural guidance for state workforce agencies to reduce certification backlogs.
Contact Abhay
Abhay Patel is a co-founder of FCA. He leads our WOTC tax credit practice with expertise in enterprise software solutions and business integrations. His past experience at WOTC.com and J.P. Morgan Chase has led to an efficient and streamlined approach to tax credits and incentives.
Dallas, Texas
See how a custom WOTC integration fits your hiring and payroll process.
