HISTORY

Some years ago, federal legislation allowed for Targeted Jobs Tax Credit (TJTC) which provided for possible tax credits for employers hiring people with disabilities.  Unfortunately, TJTC authorization was time limited, at times not reauthorized or in other situations was allowed to lapse.  In 1996, Work Opportunities Tax Credit (WOTC) authorized under the Small Business Job Protection Act, replaced TJTC.  There was no legislation passed in 2006, however, the reauthorization of WOTC in the "Tax Relief and Health Care Act" made WOTC retroactive to January 1, 2006 and continued authorization until December 31, 2007.

In May 2007, Congress passed the Small Business and Work Opportunity Tax Act extending the WOTC until August 31, 2011.

THE CREDIT

For Vocational Rehabilitation job candidates who are hired, an employer may take a tax credit of up to 40% of the first $6,000 ($2,400) in wages paid to the employee during the first year (12-month period) of hire for employees who work 400 hours or more.  Employers can also claim a partial tax credit of 25% of wages paid for employees work at least 120 hours but less than 400 hours.

CLAIMING THE CREDIT

For a brief introduction to how the credit works, please take a look at the Self-directed Powerpoint Presentation at:

"Work Opportunities Tax Credit:  What it Is, What it isn't and How to Make It Work for Your Employer Partners," (updated, 2008).

FORMS

IRS FORM 8850 located at  www.irs.gov/pub/irs-pdf/f8850.pdf

ETA 9061 located at www.uses.doleta.gov/pdf/Appendix_II/Appendix_II__1_ETA_9061.pdf

 ETA 9062 located at http://www.dol.state.ne.us/nwd/empserv/wotc/forms/Form%20ETA%209062.pdf

(NOTE:  ETA 9062 IS A CONDITIONAL CERTIFICATION AND CAN BE COMPLETED BY A VR PROFESSIONAL.  NOT FOR USE BY BUSINESS INDEPENDENTLY)

All Forms are to be forwarded to the State WOTC Coordinator.  In North Carolina, that is:

Ms. Virginia Terrell, Employment Security Commission
POB 27625
Raleigh, NC  27611
(919) 733-4896
(919) 733-3010 (fax)
virginia.terrell@ncmail.net