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WOTC is the acronym for the work Opportunity Tax Credit and was put into place as an incentive to begin the hiring process again of people from disadvantaged groups or backgrounds, including recipients of Temporary Assistance for Needy Families, disabled or unemployed veterans, food stamp recipients, those residing in a renewal community or rural renewal county, youths looking for summer work, former prisoners, Social Security income recipients, Hurricane Katrina affected residents or disconnected youth between the ages of 16 and 25. The list is broad, no doubt, but also very specific in making the determinations as to who is qualified and who’s not, says A. Harrison Barnes, Hound.com founder. He says despite the broad classifications, eligibility can be a bit restrictive and employers who are interested should contact their state employment agencies. That said, those who hire from these groups will enjoy significant tax benefits, including:

  • Up to $2,400 for each adult that’s hired
  • Up to $1,200 for each teen or Summer Job that’s filled by a kid out of school
  • Up to $4,800 for each disabled veteran who is hired; and
  • For each long term TANF recipient who his hired over a two year period, the benefit can be as much as $9,000 per hire.

So does this mean there are strict hiring limits? A. Harrison Barnes says as long as the employees fall into one of the predefined eligible groups, an employer may hire as many as he chooses. Further, there are at least 39 states that are offering simultaneous state credits, so the benefits could be quite significant, says Barnes.

This continues to be a growing trend with more than 691,000 certifications issued in 2008 alone. The numbers have been steadily climbing every year since. The Hound.com founder is quick to mention that this program, while it shares many similarities with other programs, such as the Welfare to Work tax credit and the HIRE Act, this is a stand alone act. This means a business doesn’t have to qualify for one of the other programs or even be participating in another program to become eligible for this one.

This is a great way to play a role in jumpstarting the economy again, while also closing the gap for those who might have difficulties in finding jobs. It’s beneficial for all involved, but most importantly, you, as a business owner, have an opportunity to make a real difference. The tax benefits are just a bonus; the real reward is finding that diamond in the rough that you might would have otherwise overlooked. Too many times, employers overlook a troubled teen. You never know when a leap of faith is all he needs to run with a new opportunity and build an incredible life from it, says A. Harrison Barnes. For more information on the program, visit DOLETA.gov. Here you’ll find fact sheets, details of the program and all of the prerequisites.

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