Work Opportunity Tax Credit (WOTC)

Work Opportunity Tax Credit (WOTC) is sponsored by U.S. Department of Labor (administered by Texas Workforce Commission). This is a federal tax credit for employers who hire individuals from targeted groups, including veterans, long-term unemployed, SNAP recipients, and ex-felons. It is designed to reduce the cost of growing a team for Texas businesses.

Work Opportunity Tax Credit Program - Texas Workforce Commission Work Opportunity Tax Credit Program The Work Opportunity Tax Credit (WOTC) is a federal tax credit for businesses. It encourages employers to hire jobseekers who face challenges in finding work. The U.S. Department of Labor (DOL) and the Internal Revenue Service (IRS) regulate the WOTC program together.

WOTC's goal is to help individuals get jobs, earn money and become responsible taxpayers. It's part of efforts to promote diversity at work and make it easier for Americans to find good job opportunities. WOTC Information for Employers Learn more about how businesses can save thousands of dollars in federal taxes.

WOTC Information for Jobseekers Learn how the WOTC program can help jobseekers promote their value to employers. WOTC Online Portal Information Find resources and learn how to use the system and register for the portal.

U.S. Department of Labor - Work Opportunity Tax Credit Internal Revenue Service – Work Opportunity Tax Credit WOTC Target Group Overview ETA Form 9061, Individual Characteristics Form ETA Form 9198, Employer Representative Declaration Form TWC Form 1098,Employer Application for Refund of Taxes Paid to the State of Tex… In 2020, Congress passed the Consolidated Appropriations Act .

This law extends the authorization of tax credits and empowerment zones until the end of 2025. WOTC Authority and Funding Status The Work Opportunity Tax Credit (WOTC) is a federal program, and its current authorization is set to expire on December 31, 2025. Historically, Congress has reauthorized the program in the past; however, there is no official confirmation yet regarding reauthorization status.

The Texas WOTC Unit will continue to ACCEPT and PROCESS all IRS Form 8850/ETA Form 9061 applications beyond 2025. However, all applications will reflect a "HIATUS" status pending program reauthorization. Once the DOL reauthorization TEGL is received, the WOTC Unit will begin the release of final determinations, including denials and certifications.

Portal users should continue to submit the IRS Form 8850/ETA Form 9061 applications, ETA Form 9198 ERDs (If applicable) and continue to upload support documents using your WOTC OLS portal account to ensure the 28-day "timely filing" requirement. Even though DOL and IRS have typically provided a transition relief period during a WOTC program lapse, it is never a guarantee.

Consultants—Employer Representative Declarations (ERDs) Prior to ANY/ALL IRS Form 8850/ETA Form 9061 submissions, there MUST be a current/valid/approved ERD on file for the EIN being submitted. As per the SIGNED WOTC Online System User Account Request Form that is on file, DO NOT SEND ANY IRS Form 8850/ETA Form 9061 APPLICATIONS POSTAL MAIL; THEY WILL NOT BE PROCESSED/UPLOADED BY THE WOTC UNIT.

Nonportal users should continue to submit the IRS Form 8850/ETA Form 9061 applications, support documents either by email to the WOTC Unit email address wotc@twc. texas. gov or by postal mail to ensure the 28-day "timely filing" requirement.

Even though DOL and IRS have typically provided a transition relief period during a WOTC program lapse, it is never a guarantee. Applications submitted under FORTHCOMING status will be processed accordingly. The OLS will continue to issue the NEEDS-Forthcoming letter so that support docs can be uploaded, and FORTHCOMING status can be released for review.

The WOTC Unit will NOT issue the final determinations until the DOL reauthorization TEGL has been received. If a transition relief (TR) is granted due to a reauthorization lapse, the WOTC Unit will AUTOMATICALLY process those applications that were denied as "untimely" filed within the 28-day requirement. DO NOT HOLD applications assuming there will be a TR.

Standard practice for the Texas WOTC Unit during ANY HIATUS is to continue receiving and processing WOTC applications until the reauthorization TEGL is received. Once received, final determinations will be "released" UNLESS there are changes to TG eligibility.

Depending on the length of the TR, the "release" of final determinations will be done based on a predetermined schedule by the programming team so not to overload the "batch processes." The WOTC unit will send out communications accordingly as to the status of HIATUS applications.