Department of Labor and Regulation

Title - Work Opportunity Tax Credit

Federal Authorization & Timeframes

On May 25, 2007, the President signed into law the Small Business and Work Opportunity Tax Credit Act of 2007 (P.L. 110-28). The legislation modified the WOTC provisions in the Tax Relief and Health Care Act of 2006 signed into law on December 20, 2006, and extended the tax credit through December 31, 2011.

The Tax Relief and Health Care Act of 2006 (P.L. 109-432) merged the Welfare-to-Work Tax Credit (WtWTC) with the Work Opportunity Tax Credit (WOTC) effective with those job seekers with a hired date beginning January 1, 2007.

Some of the significant changes which apply to hires who begin work for an employer after December 31, 2006 are:

It eliminated the earnings test or income guidelines for ex-felons.

It increased the maximum age for Supplemental Assistance Nutrition Program (SNAP) recipients from those who were 18 but not yet 25 years of age to 18 years of age but not yet 40 years of age.

It increased the filing deadline for Certification requests to 28 calendar days from 21 calendar days.

It incorporates the Welfare-to-Work tax credit into the WOTC and considers it Target Group I. Long Term Family Assistance Recipient.

The Small Business and Work Opportunity Tax Act of 2007 (P.L. 110-28) modifications which apply to those new hires who began work after May 25, 2007, are:

It renames the Target Group D. High-Risk Youth to Target Group D. Designated Community Residents and increases the age from 18 but not yet 25 years of age to 18 but not yet 40 years of age; and expands this group to include certain Rural Renewal Counties.

It establishes a new disabled veteran's sub-group for veterans that are considered to have a Service-Connected disability and discharged from the military within the last 12 months or a Veteran that has been unemployed for an aggregate six months within the last 12 months.

It clarifies the Individual Work Plan under Target Group E. Vocational Rehabilitation Referrals.

It extends the WOTC for 44 months through August 31, 2011.

On January 2, 2013, President Obama signed the American Taxpayer Relief Act of 2012.

In summary, this legislation:

  • Continues the uninterrupted implementation of all veteran target groups, including those implemented under the VOW Act through December 31, 2013.
  • Retroactively reauthorizes all WOTC non-veteran target groups from December  31, 2011 through December 31, 2013.
  • Provides legislative authorization for Empowerment Zones from December 31, 2011 through December 31, 2013.
  • Does not reauthorize the Recovery Act disconnected youth and Recovery Act unemployed veteran target groups that expired at the end of 2010.

 

 


Marcia Hultman, Secretary
700 Governors Drive
Pierre, SD 57501-2291
Tel. 605.773.3101
Fax. 605.773.6184