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Work Opportunity Tax Credit

Work Opportunity Tax Credit

According to the Illinois Department of Employment Security (IDES), under the Work Opportunity Tax Credit (WOTC) may claim tax credit by the following: “If the individual works at least 120 hours, the employer may claim a tax credit equal to 25% of the individual's first year wages, up to the maximum tax credit. If the individual works at least 400 hours, the employer may claim a tax credit equal to 40% of the individual's first year wages, up to the maximum tax credit.” According to the U.S. Department of Labor Employment and Training Administration, “the maximum tax credit amounts depend on the wages paid to the new hire, the new employee's target group and the number of hours worked during the first year of employment.” Usually, the maximum tax credit for hiring former felons is $2,400. There are no limitations for the number of individual employees that employers can claim. All the employer has to do is submit three (3) forms to Patrick.Durkin@illinois.gov or Patrick Durkin, WOTC Unit, Illinois Department of Employment Security, 33 South State Street, Suite 1000, Chicago, IL 60603-2802 within 28 calendar days of the employee’s start date.

Some very helpful websites are: http://www.ides.illinois.gov/Pages/Work_Opportunity_Tax_Credit.aspx (Illinois WOTC info)

https://www.doleta.gov/business/incentives/opptax/benefits.cfm (US breakdown/info)

https://www.doleta.gov/business/incentives/opptax/forms.cfm (Required forms)

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