WOTC Wednesday: How Are the Work Opportunity Tax Credits Calculated?

CMS’s Brian Kelly answers your questions about the Work Opportunity Tax Credit.

Today’s WOTC Wednesday question: How Are The WOTC Tax Credits Calculated?

CMS Responds: Question is “We get these WOTC Tax Credits, how are they calculated?” There’s actually two benchmarks, the first one is the employee has to work a minimum of 120 hours and qualify for one of the targeted groups. If they work over 120 hours that’s 25% of the employee’s gross wages up to the first $6,000.  If they work over 400 hours you can get 40% of the first $6,000 in wages which is where that $2,400 tax calculation comes from.

 

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