The Work Opportunity Credit (WOTC) is a federal tax credit for employers who hire and pay people who are having trouble getting into the workforce.
- The credit is usually equal to 40% of the qualified first-year wages of employees who worked at least 400 hours.
- The credit is reduced to 25% of the qualified first-year wages for employees who worked at least 120 hours but less than 400 hours in their first year.
Most employers can claim around $2,400 in WOTC. This powerful tax savings tool expires on December 31, 2025.
Businesses That Qualify for the WOTC
You must be a taxable employer or a specific type of tax-exempt employer who hires and pays workers with certification from a state workforce agency as members of one of the 10 groups listed below to qualify:
