The Work Opportunity Tax Credit, known as #WOTC, is a federal tax credit available to employers who hire individuals from disadvantaged groups of workers. Including WOTC Screening can save an employer significant amounts of money.
WOTC Screening is used to determine if a new hire is a member of one of the Work Opportunity Tax Credit’s ten target groups that would make the employer eligible to receive a tax credit for hiring the individual.
New hires who fall under one or more of WOTC’s Target Groups may make you eligible for a WOTC Tax Credit. Target Group #2 is the Qualified Veteran. 106,697 individuals were hired with certification from this group in 2020, 6.58% of the total, making it the second overall certified category.
Qualified Veteran
A “qualified veteran” is a veteran who is any of the following:
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- A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) (food stamps) for at least 3 months during the first 15 months of employment.
- Unemployed for a period totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date.
- Unemployed for a period totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.
- A disabled veteran entitled to compensation for a service-connected disability hired not more than one year after being discharged or released from active duty in the U.S. Armed Forces.
- A disabled veteran entitled to compensation for a service-connected disability who is unemployed for a period totaling at least six months (whether or not consecutive) in the one-year period ending on the hiring date.
The maximum tax credit available for hiring a Qualified Veteran is $9,600. As outlined below, the actual amount will verify depending on the qualifying category.
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About CMS WOTC Screening Services
- Why you should use CMS’s WOTC Tax Screening Service rather than doing it yourself.
- Get an idea of how much you could be saving by utilizing the Work Opportunity Tax Credit for your company, try our WOTC Calculator.
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