Work Opportunity Tax Credit Calculator
The Work Opportunity Tax Credit (WOTC) is a federal tax incentive available to employers who hire individuals from specific
targeted groups that have historically faced significant barriers to employment.
Answer a few questions to see if you’re eligible and calculate your credit.
Developed by Civitas Strategies
Qualified Target Groups
& Their Eligibility Requirements
- SNAP Recipient: Family received SNAP at least 3 months in the 15-month period before hiring
- Short-term Unemployment: Unemployed ≥4 wks (<6 months) in yr before hiring
- Long-term Unemployment: Unemployed ≥6 months in yr before hiring
- Service-connected Disability: Hired within 1 year of discharge
- Disability + Unemployment: Service-connected disability & unemployed ≥6 months
- Family received TANF ≥18 consecutive months ending on hiring date
- Received TANF any 18-month period (post-Aug 5, 1997) & hired within 2 yrs after end
- Family ineligible for TANF due to time limits & hired within 2 yrs of loss
- Age 18–39 at time of hire
- Family received SNAP for 6 months ending on hire date, OR
- Family received SNAP for ≥3 of the 5 months ending on hire date
- Age 18–39 at time of hire
- Primary residence in a federally designated Empowerment Zone or Rural Renewal County
- Person with disability completing or who completed services from:
- A state-certified vocational rehabilitation agency
- An Employment Network under Ticket to Work program
- The U.S. Department of Veterans Affairs
- Convicted of a felony under any statute
- Hired within 1 year of conviction or release
- Received SSI benefits within 60 days of being hired
- Age 16–17 at time of hiring
- Works between May 1 and Sept 15
- Resides in an Empowerment Zone
- Unemployed ≥27 consecutive weeks at time of hiring
- Received unemployment compensation during some/all of that period
Key Benefits About the
Work Opportunity Tax Credit
Tax Credits per Employee
Tax credits ranging from $1,200 to $9,600 per eligible employee.
No Limit on Hires
No limit on number of individuals an employer can hire to qualify.
Credits for Any Business
Available to businesses of all sizes, including nonprofits.
No Location Limits
Your business doesn’t have to be in an Empowerment Zone (except for that target group).
Based on Hours Worked
| Hours Worked | Credit Rate | Notes |
|---|---|---|
| Less than 120 hours | 0% (No credit) | Must work ≥120 hours to qualify |
| 120–399 hours | 25% of wages | Partial credit rate |
| 400+ hours | 40% of wages | Full credit rate |
Ready to try our Calculator? Check your Eligibility Now
Maximum Qualified Wages
| Target Group | Max First-Year Wages | Max Credit (400+ hrs) |
|---|---|---|
| Veterans (SNAP/unemployed 4–6 months) | $6,000 | $2,400 |
| Veterans (unemployed 6+ months) | $14,000 | $5,600 |
| Veterans (service-connected disability) | $12,000 | $4,800 |
| Veterans (disability & unemployed 6+ months) | $24,000 | $9,600 |
| Long-term TANF recipient (First Year) | $10,000 | $4,000 |
| Long-term TANF recipient (Second Year) | $10,000 | $5,000 (50%) |
| Summer Youth Employee | $3,000 | $1,200 |
| All Other Target Groups | $6,000 | $2,400 |
Frequently Asked Questions
The WOTC is a federal tax credit available to employers who hire individuals from targeted groups that have faced barriers to employment.
1. Screen applicants during hiring.
2. Submit IRS Form 8850 before job offer date.
3. Submit forms to your SWA within 28 days.
4. Wait for certification.
5. Claim on tax return with Form 5884.
It incentivizes hiring from groups with barriers to employment, reducing your tax liability directly.
- Employee cannot have worked for you before.
- Cannot be your dependent or relative.
- ≥50% of wages must be in your trade/business.
- Wages used for other credits cannot be reused.
A tax credit reduces your tax dollar-for-dollar, more valuable than deductions.
Disclaimer: This information is preliminary and not legal advice. Consult a tax professional.
© 2025 Civitas Strategies, LLC