FRANKFORT, Ky. (Sept. 6, 2017) — The Kentucky Career Center (KCC) issued 53,398 Workforce Opportunity Tax Credits (WOTC) to Kentucky employers during fiscal year (FY) 2017, a 30 percent increase from the 41,098 issued in FY 2016, according to the Kentucky Department of Workforce Investment.
The WOTC program potentially saved Kentucky employers more than $205 million in federal taxes.
WOTC benefits employers who hire people classified in select target groups who have consistently faced significant barriers to employment while entering or re-entering the workforce. Tax credit incentives range from $1,200 – $9,600 and are used to reduce the federal tax liability of private, for-profit employers.
“It is encouraging to see more Kentucky employers taking advantage of the Workforce Opportunity Tax Credit to hire new employees because it helps them reduce taxes and it assists people who have historically faced difficulty getting a job or re-entering the workforce,” said Beth Kuhn, commissioner of the Kentucky Department of Workforce Investment.
For employers to receive a tax credit, they must hire an individual who meets the criteria of at least one of the target groups. The target groups include:
• unemployed veterans and veterans with disabilities;
• recipients of public assistance such as Temporary Assistance to Needy Families (TANF) and Food Stamps;
ex-felons;
• residents of an Empowerment Zone, Renewal Community or Rural Renewal County;
• vocational rehabilitation referrals;
• long-term unemployment insurance recipients;
• eligible summer youth employees; and
• qualified recipients of supplemental security income (SSI).
“Prior to claiming the tax credit with the IRS, an employer must request and receive certification from the KCC Tax Credit Unit stating the new hire is a member of at least one of the WOTC target groups,” said Michelle DeJohn, Employer Customer Services branch manager. “This numbered certification will be for the highest value target group requested and for which the new hire is qualified.”
More than a third of the $205,523,400 in potential tax credits from July 1, 2016 – June 30, 2017, were hires who qualified as Supplemental Nutrition Assistance Program (SNAP) recipients with 35,968 hires accounting for $86,323,200. TANF recipients were the next highest group with $66,321,000 in potential tax credits.
DeJohn said the WOTC program was partly so successful due to a new automated application processes.
“It’s a five-step process that involves creating a user account with the Kentucky Online WOTC system to submit applications and receive email updates on WOTC program changes,” DeJohn said. “We hope more employers will use the program.”
The Kentucky Tax Credit Unit may be reached at 502-782-3465 or at [email protected].
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