Many companies are currently experiencing a severe lack of available workers, so it’s important that those in charge of hiring be aware of a valuable tax credit for hiring people who have been out of work for an extended period of time or who are members of other groups with significant barriers to employment. The Work Opportunity Tax Credit (WOTC) might help if your company is currently employing.

You should speak with professional accounting services in Aventura if you have any questions. 


The WOTC has had its expiration date pushed back to the end of 2025, thanks to legislation that was passed in December. Employers who hire people who have been verified as members of one of ten groups with historically low employment rates are eligible for a tax break. Millions of Americans have been out of work temporarily or permanently since the pandemic began. One group being targeted is long-term unemployment recipients. These are people who have been unemployed for at least 27 weeks in a row and received unemployment benefits at some point during that time.

Persons Eligible for Employment

Many more fall into this category, such as certain veterans and those who rely on various forms of governmental assistance. Those 10 classes are as follows:

  • Families who qualify for TANF (Temporary Assistance for Needy Families),
  • Persons referred from vocational rehabilitation; people with criminal records; people living in Empowerment Zones or Rural Renewal Counties; unemployed veterans; people with disabilities
  • Work-study students from Empowerment Zones, people receiving food stamps or SSI, people receiving long-term family assistance, those receiving long-term jobless benefits, etc.

Eligibility for the Tax Break

The credit is available to businesses who submit a request for certification to their state’s workforce agency using IRS Form 8850, Pre-screening Notice, and Certification Request for the Work Opportunity Credit (SWA). Never send this to the Internal Revenue Service.

An eligible worker has 28 days from the day they started working to file Form 8850 to the SWA. The Work Opportunity Tax Credit (WOTC) can be deducted from federal taxes by qualifying firms. Wages earned by qualified employees in their first year on the job are the primary factor. Form 5884, Work Opportunity Credit, is used to calculate the credit, and Form 3800, General Business Credit, is used to claim the credit