FAQs – Work Opportunity Tax Credit (WOTC)

The WOTC (Work Opportunity Tax Credit) gives employers a tax break for hiring certain workers. Employers can get up to $9,600 in tax credits.

The WOTC has two main goals:

1. To encourage employers to hire people from target groups.
2. To provide tax credits to employers who do so.

The target groups for the WOTC include:

• TANF Recipients: People receiving Temporary Assistance for Needy Families.
• Qualified Veterans: Veterans receiving Food Stamps or with a service-connected disability who:
  • Are hired within one year of leaving active duty, OR
  • Were unemployed for at least six months in the past year.
• Ex-Felons: People hired within one year of a conviction or prison release.
• Designated Community Residents: People aged 18–39 who live in an Empowerment Zone or Rural Renewal County.
• Vocational Rehabilitation Referrals: Individuals with work plans through vocational programs or Employment Networks.
• Summer Youth Workers: Youth aged 16–17 who live in an Empowerment Zone.
• SNAP Recipients: People aged 18–39 who receive Supplemental Nutrition Assistance Program (SNAP) benefits.
• SSI Recipients: People receiving Supplemental Security Income.
• Long-Term Family Assistance Recipients: Individuals getting long-term family assistance.
• Long-Term Unemployed: People unemployed for a long period before being hired.

Employers cannot claim a tax credit for hiring relatives. This includes:

• Children, stepchildren
• Siblings, stepsiblings
• Parents, stepparents
• Relatives such as nieces, nephews, uncles, or aunts
• In-laws (e.g., parent-in-law, child-in-law, sibling-in-law)
• Descendants of the above
• Anyone residing in the employer’s home

Employers cannot request WOTC certification for rehired employees. The employee must be WOTC-qualified and certified only during their first time working for the employer.

A disabled veteran qualifies an employer for the tax credit if they:

• Receive payments from the VA for a service-connected disability, AND
• Are hired within one year of leaving active duty, OR
• Were unemployed for at least six months in the year before being hired.

The tax credit amount depends on the target group:

• For TANF recipients, veterans, ex-felons, designated community residents, vocational rehabilitation referrals, SNAP recipients, SSI recipients, or long-term unemployed:
  • 40% of first-year wages up to $6,000 if the employee works at least 400 hours.
  • 25% of first-year wages up to $6,000 if the employee works 120–399 hours.
• For summer youth workers:
  • The credit applies to wages up to $3,000.
• For group long-term family assistance recipients:
  • 40% of first-year wages up to $10,000.
  • 50% of second-year wages up to $10,000.
  • The employee must work at least 180 days or 400 hours.

Employers can claim the Work Opportunity Tax Credit for up to two years. If they don’t use the full credit because of tax limits, they can apply it to the previous year or carry it forward for up to 20 years.

• For TANF recipients, veterans, ex-felons, designated community residents, vocational rehabilitation referrals, summer youth workers, SNAP recipients, SSI recipients, or long-term unemployed:
  • 40% tax credit if the employee works at least 400 hours.
  • 25% tax credit if the employee works 120–399 hours.
• For long-term family assistance recipients:
  • The employee must work 180 days or 400 hours.
  • Tax credit amounts depend on wages.
  • Refer to “What is the amount of the credit available through WOTC?” for details.

To apply for the WOTC, follow these steps:

1. Pre-Screening: Check if the job seeker qualifies.
   • Complete the Individual Characteristics Form (ETA 9061) (PDF).
   • Complete the Pre-Screening Notice and Certification Request (IRS Form 8850) (PDF).
   • Both the employer and job seeker must sign the forms under penalty of perjury, confirming the job seeker belongs to a target group.
2. Submit Forms:
   • Send Form 8850 and ETA 9061 to the Employment Development Department (EDD) online or by mail.
   • Forms must be submitted or postmarked within 28 days of the job seeker starting work.
3. For Target Group L:
   • If the job seeker might qualify as a Long-Term Unemployment Recipient, include the Self-Attestation Form (ETA Form 9175) (PDF) with the other forms.
4. Submission Options:
   • Online: Use the Work Opportunity Tax Credit Online (eWOTC)
     • Enroll in Employer Services Online.
     • Log in to eWOTC to submit your request.

For more details, visit the EDD website or contact their office.

By Mail

You can also submit your WOTC forms by mailing them to the EDD’s WOTC Center.

Steps:

1. Complete the required WOTC forms:
   • Form 8850
   • ETA 9061
   • ETA Form 9175 for Long-Term Unemployed (if applicable).
2. Mail all forms to:

EDD WOTC Center
2901 50th Street
Sacramento, CA 95817

You can view, download, or print all WOTC forms from the WOTC Forms and Publications page. If needed, download the free Adobe Reader to access and print the documents.

For help, you can contact the California WOTC Processing Center toll-free at 1-866-593-0173.

Visit Contact WOTC for more details.