The Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal income tax benefit administered by the U.S. Department of Labor (DOL) for employers who hire individuals from specified target populations. WOTC reduces a business’s federal tax liability, serving as an incentive to select job candidates who may be disadvantaged in their efforts to find employment.
Qualifying for WOTC
Employers are eligible for a tax credit when hiring individuals with specified barriers to employment identified as target groups. TWC will verify for employers which target group applies. Tax credits currently are available for hires in the following categories:
Veterans
| Target Group | Maximum Tax Credit |
| Disabled veterans with a service-connected disability who have been unemployed for at least six months | $9,600 |
| Veterans who have been unemployed for at least six months | $5,600 |
| Disabled veterans with a service-connected disability | $4,800 |
| Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits | $2,400 |
| Veterans who have been unemployed for at least four weeks | $2,400 |
Non-Veterans
| Target Group | Maximum Tax Credit |
| Long-Term Family Assistance recipients who are members of a family that has received Temporary Assistance for Needy Families (TANF) benefits for at least 18 consecutive months | $9,000 |
| TANF recipients | $2,400 |
| Ex-felons | $2,400 |
| Designated community residents– (Empowerment Zones expired 12/31/2016.) | $2,400 |
| Vocational rehabilitation referrals | $2,400 |
| SNAP recipients | $2,400 |
| Supplemental Security Income recipients | $2,400 |
| Long-Term Unemployment Recipients | $2,400 |
| Summer Youth program participants who are 16 to 17 years old, work between May 1 and September 15 and live in an empowerment zone–(Empowerment Zones expired 12/31/2016.) | $1,200 |
Applying for WOTC
Within 28 days of the employee’s start date, employers hiring individuals from one or more of the identified target groups must complete the following:
- IRS Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit (PDF)
- ETA Form 9061, Individual Characteristics Form (PDF) (If the new hire has been given the ETA Form 9062, Conditional Certification, it may be used in lieu of the ETA Form 9061.)
TEGL Guidance
TEGL No. 25-15 Change 1 states that as a postmark date on/after April 12, 2017, SWAs may ONLY issue the ETA Form 9063- (OMB No. 12050371) Employer Certification Form for all WOTC target groups only if submitted on ETA forms (Revised May 2016) with OMB Control Number 1205-0371 and IRS Form 8850 (Revised March 2016) with OMB Control Number 1545-1500.
Mail, fax, or e-mail forms to:
Texas Workforce Commission
WOTC Unit
101 E 15th Street, Room 202T
Austin, Texas 78778-0001
Fax: 512-463-8819
wotc@twc.state.tx.us
If you are filing the forms by e-mail, the attached forms must be password-protected, and the password must be sent in a separate e-mail to the same e-mail address. Employers and consultants submitting forms by fax or e-mail will be required to maintain the original forms for the required retention period (four years for certifications and one year for denials).
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