Expansion of Federal Tax Savings Program can help Employers save money each year

Qualified Long-Term Unemployment Recipient added to those eligible for Work Opportunity Tax Credit

Woman standing in doorway of restaurant smiling

Employers who hire a Qualified Long-Term Unemployment Recipient are now entitled to receive up to $2,400 in tax savings for each individual added to their payroll starting January 1, 2016. As part of the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act), this group was added to the list of targeted populations who qualify for the Work Opportunity Tax Credit (WOTC).

WOTC, a federal income tax benefit administered by the U.S. Department of Labor for employers, helps targeted workers move from economic dependency into self-sufficiency as they earn a steady income and become contributing taxpayers, while participating employers are able to reduce their income tax liability.

The Texas Workforce Commission (TWC) assists employers by certifying the eligibility of individuals for this federal employer tax benefit. For more information regarding the WOTC program, visit the TWC WOTC web page.

Eligible groups, including the new Qualified Long Term Unemployment Recipients, for WOTC include:

  • Ex-felons
  • Residents of empowerment zones or rural renewal counties
  • Summer youth
  • Supplemental Nutritional Assistance Program (SNAP) benefit recipients
  • Supplemental Security Income recipients
  • Temporary Assistance for Needy Families (TANF) recipients
  • Vocational rehabilitation referrals
  • Long Term Family Assistance recipients
  • Veteran groups – Veterans receiving SNAP benefits, disabled and unemployed veterans

Each group has specific qualifications and employers can earn a tax credit from $1,200 to $9,600 per eligible employee hired, depending on which group the newly hired worker represents.