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The Work Opportunity Tax Credit (WOTC) is a federal income tax credit designed to help people gain on-the-job experience and achieve better employment outcomes. The WOTC program offers federal tax credits to employers as an incentive to hire people in several specific target groups.
WOTC applies only to new employees. The new employee must belong to one of the following target groups:
Employers can claim up to 40% of the first $6,000 in qualified first-year wages for a maximum credit of $2,400 per new hire.
Calculation of WOTC tax credit
For Long-Term Family Assistance -- tax credits can be earned for the first two years of employment, wages are capped at $10,000:
For Disabled Veterans discharged within a year, wages are capped at $12,000:
For Unemployed Disabled Veterans -- wages are capped at $24,000:
For Unemployed Veterans -- wages are capped at $14,000:
1. Complete BOTH SIDES of the IRS Form 8850, "Work Opportunity Credit Pre-Screening Notice and Certification Request". The job applicant should complete the front side, and the employer or representative must complete the back side of the form on or before the job offer date.
The 8850 form must be complete in every detail.
Note: This document must be entered or uploaded in the eWOTC system or mailed to the WOTC Office at the DWD address below within 28 days of the job start date or the application will be denied (no exceptions). Follow these Instructions on how to upload in bulk to eWOTC
2. Complete the ETA Form 9061 (Individual Characteristics form) if the job applicant does not have a completed ETA Form 9062 from a service provider. Client service providers may provide job applicants with ETA Form 9062, "Conditional Certification", identifying them as a member of a WOTC target group.
Job applicants would then give this form to the potential employer to complete their portion of the form.
Employer/Representatives using Form ETA 9061 must staple reasonable eligibility documentation of a target group to this form, or provide reasonable audit trail information in response No. 19 on the form. (ETA Form 9061)
When Conditional Certification form ETA 9062 is used, the state or delegated agency representative providing service to the target group applicant must sign it. Employee would then provide this signed form to the employer. With the agency signature, no other documentation is required.(ETA Form 9062)
Where to get documentation (Conditional Certification)
Many applicants have documentation of their eligibility; others may obtain confidential documentation about themselves from the relevant government or private non-profit service agency,
You can ask the local agency (Job Placement, Counselor, Social Worker, Parole Officer, etc.) who has provided services to the applicant, to sign the Conditional Certification. When a conditional certification is obtained, no other documentation is required.
Agencies having signature authority
Any representative of the Department of Workforce Development; Job Centers, DVR or County Departments of Social Services or grantee agencies of the department. The Department of Corrections staff as well as many local agencies has authority to sign WOTC Conditional Certifications for their eligible clients.
3. Return all completed forms: IRS 8850 and Individual Characteristics ETA Form 9061 or if you received a completed Conditional Certification ETA Form 9062 to your local Job Center or mail to:
Department of Workforce Development (DWD)
Federal Tax Credits, Rm. G100
201 E. Washington Ave., PO Box 7972
Madison WI 53707-7972
You file for the credit when you fill out your annual Business Federal Income Tax Forms. In addition to these forms, you will need an IRS 5884 Form and the Tax Credit Certification issued to you by the Wisconsin Department of Workforce Development Tax Credit Unit.
Questions and Assistance
For assistance contact your local Wisconsin Job Center.
Email WOTC Staff