Work Opportunity Tax Credit

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What is the Work Opportunity Tax Credit?

  • The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain targeted groups who have consistently faced significant barriers to employment.
  • The WOTC was established in 1996, and has been successfully renewed 11 times.
  • The U.S. Department of Labor and U.S. Department of Treasury jointly administer the implementation of this program through the IRS.
  • The WOTC provides a fiscal incentive for employers to hire individuals who face challenges in entering the workplace, making it more difficult for them to attain independence and self-sufficiency.
  • The WOTC helps vulnerable citizens find gainful employment, and reduces state/federal expenditures on public assistance.

Making Transition Age Foster Youth a Priority Population

  • Senator Bob Casey is preparing to introduce the Improved Outcomes for Foster Youth Act, which would make transition-age foster youth one of the populations that are targeted by the WOTC. This would incentivize employers to hire transition-age foster youth.
  • Throughout the WOTC’s history, there has been an ever-evolving list of target groups. The original WOTC target groups included economically disadvantaged youth.
  • Current priority populations who benefit from the WOTC include:
    • Summer Youth Employees
    • Veterans who are unemployed, disabled and/or on food stamps
    • Ex-felons
    • Families who are deemed eligible for Temporary Assistance for Needy Families (TANF)
    • Individuals who qualify for Social Security Income (SSI)
    • Individuals who qualify for food stamps (SNAP: Supplemental Nutritional Assistance Program)
    • Individuals who have a physical or mental disability which constitutes a handicap to employment who are receiving rehabilitative services

How You Can Help

  • We invite foster care youth and alumni to share a personal story of why this matters, and/or how this might have helped you.
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