Work Opportunity Tax Credit

The Work Opportunity Tax Credit (WOTC) is Federal program designed to help people move from economic dependency to self-sufficiency by providing an incentive to employers in the private sector to hire from among several groups of job seekers that face barriers securing employment. This incentive is in the form of a substantial credit against the employer's Federal income tax.

New employees potentially eligible for the WOTC program include those that are receiving, or have received, certain government assistance including Kentucky Transitional Assistance Program (K-TAP), food stamp Supplemental Nutrition Assistance Program (SNAP), and Supplemental Security Income (SSI); people with disabilities; veterans; ex-felons, and people who are between 18 and 24 years of age and live in federally-designated empowerment zones, and rural renewal communities.

The amount of tax credit varies depending upon wages and the number of hours worked by the WOTC eligible employee. For most target groups, the tax credit is based on qualified wages paid to the employee for the first year of employment. For most target groups the qualified wages are capped at $6,000. The tax credit is 25% of qualified first-year wages for those employed at least 120 hours but fewer than 400 hours and 40% for those employed 400 hours or more. Wages for Summer Youth are capped at $3,000. Wages for Disabled Veterans are capped at $12,000. The long Term Family Assistance Recipients of K-TAP wages are capped at $10,000. The tax credit is also available for the employee's second year of qualified wages, capped at $10,000; the tax credit is 50% of qualified wages.

For more information or to submit requests for certification contact the Kentucky Office of Employment and Training at:

 WOTC - Kentucky Office of Employment & Training
275 East Main Street, 2W-A
Frankfort, Kentucky 40621
(502) 782-3069

 

Unemployment Tax Credit

The Unemployment Tax Credit (UTC) program provides employers a credit of $100 per eligible hire against the employer's Kentucky income taxes when hiring residents that have been unemployed for 60 days and remain on the payroll for at least 180 days. UTC regulations and application form can be found here.  For more information, contact the WOTC Unit at 502-782-3069.