The Work Opportunity Tax Credit, or WOTC, is a federal program designed to help employers hire individuals who face barriers to employment while offsetting some hiring and training costs. Established in 1996, the program has been periodically renewed by Congress and continues to connect businesses with job seekers from targeted groups.
Eligible individuals may include veterans, people recently released from incarceration, and others who may face challenges entering the workforce. By offering a financial incentive, WOTC encourages employers to expand their talent pool and consider candidates who might otherwise be overlooked.
Employers can receive a federal income tax credit based on wages paid during an employee’s first year, with most credits up to $2,400 per eligible hire. Some categories, including certain veterans, may qualify for higher amounts. To claim the credit, employers must confirm eligibility and receive certification through their state workforce agency.
Research suggests the program may also reduce reliance on public assistance programs. Estimates indicate each certified hire can generate about $17,700 in public savings through decreased use of services such as Medicaid and food assistance.
For nearly 30 years, WOTC has supported workforce participation while helping businesses meet hiring needs, aligning with shared goals of economic growth and opportunity.
