Work opportunity tax credit : put tax savings in the palm of your hand : find out about WOTC : how to use it, who qualifies, what requirements are needed, centralized processing information

What is WOTC?
A one-year credit program called Work Opportunity Tax Credit is available to employers who hire new employees from certain "targeted groups." The credit is used to reduce the federal tax liability of private-forprofit employers.
The maximum credit available is based on the total of qualified wages paid and the number of hours retained during the first year of employment. The exact amount of net tax savings depends upon each employer's tax bracket plus qualified wages paid. This credit can not exceed $2,400.
Also, under WOTC, employers can benefit from special provisions for hiring qualified 16 - and 17- year olds for summer jobs. Employers who employed new workers from this target group between May 1 and September 15 may qualify for a tax credit based on the first $3,000 in wages paid to each certified youth during the 90-day required working period. This credit can not exceed $1,200.
The tax credit does not apply to certain relatives of employers, nor to rehired workers who were not certified during their previous employment.

Requirements for WOTC?
If an employer is requesting WOTC certification for a new employee, a PreScreening Notice (IRS Form #8850) must be postmarked on or before the 21st day after the employee starts work.
The new employee must work a minimum of 120 hours before the tax credit can be claimed.
While no WOTC tax credit may be claimed for an employee on an on-thejob training contract, credit may be claimed for wages paid after the contract expires. However, the employee must have been certified for WOTC prior to the first starting date with the employer. Also, the time spent by the employee on OJT qualifies the employer toward fulfilling the minimum retention period.
Save Time and Money
y Wages paid to temporary, seasonal, part-time and full-time employees qualify for the credit.
y There is no limit to the number of employees for whom an employer may claim tax credit.
y The employer makes all hiring decisions.
y Claiming the tax credit requires minimal paperwork.

Using WOTC?
Before making a hiring decision, an employer should use the IRS Form #8850, "Pre-Screening Notice" (PSN), to determine the potential eligibility of the job applicant. Applicants must be screened for WOTC before the employer makes an offer of employment. Should the employer hire someone who may be WOTC eligible, he has 21 days from the start date to send this completed form to our office. Copies of the PSN may be obtained through our office.
Using the PSN, the employer tries to determine if the employee fits into one of the WOTC target groups. These groups are listed in this brochure under the "Who May Qualify" column.
If the employer believes that an applicant fits into a target group and the employer makes an offer of employment, the PSN must be mailed to the WOTC Central Unit within 21 days of the start date. Supporting documentation should be obtained to support the applicant's eligiblity for the program. This information should also be sent to the WOTC Central Unit, but does not have to be sent within the 21-day period.
Additionally, the ETA-9061, Individualized Characteristics Form, and supporting documentation should be sent to the WOTC Central Unit for each applicant. Although there is no time restriction for submitting these items, no action will be started toward certification without them.

Who may qualify?
Applicants who fall into one of the following groups may qualify for the Work Opportunity Tax Credit:
y Qualified IV-a recipient (includes AFDC) (A)
y Qualified veteran (B)
y Qualified ex-felon (C)
y High-risk youth (D)
y Vocational rehabilitation referral (E)
y Qualified summer youth (F)
y Qualified food stamp recipient (G)
y Qualified Supplemental Security Income (SSI) recipient (H)
Target Group Designation = ( )

Centralized Processing
To apply for a WOTC Certification in Georgia, the employer should mail all pertinent information to the WOTC Central Unit located in Atlanta. Once all the required information has been received by our office an eligibility determination will be made and, if appropriate, a Certification will be issued.
Send Pre-Screening Notices to: WOTC Central Unit
Georgia Department of Labor Sussex Place - Room 400
148 Andrew Young International Blvd., N. E. Atlanta, Georgia 30303-1751
y For more information about Work Opportunity Tax Credit call
(404) 656-3157 or in Georgia, 1(800)282-5859
Georgia Department of Labor
Equal Opportunity Employer/Program l Auxiliary Aids & Services Are Available Upon Request To Individuals With Disabilities
DOL-8472 (R-02/02)

WORK OPPORTUNITY
TAX CREDIT
Put tax savings in the palm of your hand
FIND OUT ABOUT WOTC
y How to use it y Who qualifies y What requirements are needed y Centralized Processing information