The Work Opportunity Tax Credit (WOTC) applies to employees hired after December 31, 2014 and those hired before December 31, 2019 for all target groups except Long-Term unemployed the WOTC applies to those hired on or after January 1, 2016 and December 31, 2019.
A new employee must belong to any one of the following 15 targeted group of individuals:
- IV-A TANF recipient - A member of a family that received Temporary Assistance to Needy Families (TANF) benefit payments for any nine months during the 18-month period ending on the hiring date.
- Qualified Veterans
2A - Veteran with Supplemental Nutrition Assistance Program (SNAP) benefits: A veteran who is receiving SNAP benefits for any three-month period in the past 12 months.
2B - Disabled Veteran (DV): A veteran discharged from the military in the last 12 months for a service-connected disability.
2C - DV Unemployed for six months: A veteran discharged from the military in the last 12 months for a service connected disability and who has been unemployed for any six months in the last 12 months.
2D - V Unemployed for four weeks: A veteran who has been unemployed for at least four weeks, but less than six months in the 12 months before he/she was hired.
2E - V Unemployed for six months: A veteran who has been unemployed at least six months in the 12 months before he/she was hired.
- Ex-felon: A person who was convicted or released from prison in the last 12 months after a felony conviction.
- Summer Youth: A person 16 to 17 years of age who lives in an Empowerment Zone and works for an employer between May 1 and September 16.
- Designated Community Resident: Any person older than 18 but not yet 40 years of age who lives in any one of 24 Rural Renewal Counties in South Dakota or the Empowerment Zone of Oglala Sioux Tribe Pine Ridge Indian Reservation.
- Vocational Rehabilitation Referral:
a. 6a. Voc Rehabilitation Referral: An individual referred by a vocational rehabilitation agency either through the state or the Department of Veterans Affairs Vocational Rehabilitation Center.
b. 6b. Ticket-to-Work Holder: An individual referred by an employment network under the Ticket-to-Work Program administered by the Social Security Administration.
- SNAP Recipient: A member of a family who is older than 18 but not yet 40 years of age and has received SNAP for the last six consecutive months prior to their hire date OR the person's case file is closed, and he/she is an abled-bodied-adult-without dependents (ABAWD) and has received SNAP payments for three consecutive months in the last five months ending on the hire date.
- Supplemental Security Income (SSI) Recipient: An individual who has received SSI benefit payments for any month ending within 60 days of their hire date.
- Long-Term TANF: A member of a family that received TANF assistance payments each month for the last 18 consecutive months ending on the hire date.
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Those who do not qualify for the WOTC
- No tax credit can be claimed for wages paid to relatives.
- No tax credit can be claimed for federally subsidized on-the-job-training; however, wages paid after the subsidy expires can qualify for the tax credit.
- No Individual who is a re-hire of the employer requesting the credit is eligible.
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