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Workforce Development - Welfare to Work Tax Credit - South Carolina

The purpose of the Welfare to Work (WtW) Tax Credit is to encourage employers to hire job seekers who are most in need of employment. The tax credit was extended through 2005.

The WtW Tax Credit is targeted to long term welfare recipients–members of families that have received Temporary Assistance for Needy Families (TANF) for at least 18 consecutive months before the date of hire, or whose family’s TANF eligibility expired under federal or state law after August 5, 1997, or whose family received TANF for at least 18 months after August 5, 1997.

The WtW Tax Credit for hiring long-term welfare recipients is as much as $8,500 per new hire: 35% of qualified wages for the first year of employment and 50% of qualified wages for the second year of employment. Qualified wages, which include tax exempt amounts received under accident and health plans as well as educational and dependent assistance programs, are capped at $10,000 per year. To qualify employers for this tax credit, new hires must be employed at least 400 hours or 180 days.

Employers must apply for and receive certification from the Employment Security Commission office that their new hire is a long-term welfare recipient before they can claim the WtW Tax Credit on their federal tax return.

Additional Information

To apply for certification, employers must complete IRS Form 8850 by the date of the job offer. This form and its instructions, each in PDF format (requires Adobe Acrobat Reader), may be found at:
http://www.irs.ustreas.gov/pub/irs-pdf/f8850.pdf
http://www.irs.ustreas.gov/pub/irs-pdf/i8850.pdf

Additionally, employers must complete ETA Form 9061. This form, in PDF format (requires Adobe Acrobat Reader) may be found at:
http://www.uses.doleta.gov/pdf/Appendix_II/Appendix_II__1_ETA_9061.pdf

See also:

Workforce Development - Work Opportunity Tax Credit

Workforce Development - Community and Workforce Development

Workforce Development - Overview

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