How Much Does the Work Opportunity Tax Credit Provide?

The Work Opportunity Tax Credit is available for businesses who hire employees failing into certain low income demographics. It replaces the Targeted Jobs Tax Credit program, and is valid through September 11, 2011. For a business to earn the tax credit, the employee must be a new hire who begins work before that date, and falls into one of the following categories:

Ex-felon Hire: This person should be hired within one year after a felony conviction or release from prison serving the sentence for said conviction. Credit amount: $2,400

Summer Youth Hire: This person should be 16 or 17 years old and hired between May 1 and September 15. Credit amount: $1,200

Veteran Hire: This person should have served in the armed forces. He or she may also be disabled and qualify the business for the credit. Credit amount: $4,800

Long-term TANF Recipient Hire: Anyone who has received Temporary Assistance for Needy Families for any period of the last 18 months. Credit amount: $9,000

Vocational Rehabilitation Referral Hire: Anyone who has recently completed or is the process of completing rehabilitative services. Credit amount: $2,400

SSI Recipient: Anyone who received social security benefits up to 60 days before the hire date. Credit amount: $2,400

To receive the credit, the employee must work at least 120 hours, but the business receives a 25% credit based on the amount earned. The full credit is earned at 400 hours. Summer hires should work at least 90 days between May 1 and September 15 to qualify.