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Workforce Development - Work Opportunity Tax Credit - South Carolina

The purpose of the Work Opportunity Tax Credit (WOTC) is to provide jobs for persons who have the most difficulty in securing employment by giving employers a tax credit for hiring them. The WOTC has been extended through December 2005.

Employers make all hiring decisions and there is no limit to the number of new hires who can qualify an employer for the tax savings. The WOTC for hiring all target groups, except for Summer Youth Employees, is up to $2,400 for each new hire; 40% of qualified first-year wages for those employed 400 or more hours; 25% for those employed at least 120 hours. Qualified wages are capped at $6,000. Summer Youth wages are capped at $3,000.

Participating employers have a maximum combined period of two years to claim the credit. WOTC and Welfare to Work Tax Credits cannot both be claimed for the same individual in the same taxable year.

Employers must apply for and receive certification from the South Carolina Department of Social Services office that their new hire is a long-term welfare recipient before they can claim the WOTC 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

Also see:

Workforce Development - Work Opportunity Tax Credit Target Groups

Workforce Development - Overview

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