The recently enacted Protecting Americans from Tax Hikes Act of 2015 (PATH) included a provision that extended the Work Opportunity Tax Credit (WOTC) through 2019, and makes the credit retroactive for new hires made on or after January 1, 2015. In addition, the list of “targeted groups” of individuals who may qualify an employer for the WOTC has been expanded to include long-term unemployment recipients hired after December 31, 2015. A new worker hired under this new category after January 1, 2016 must have undergone a period of unemployment of at least 27 consecutive weeks, and includes a period in which he or she received unemployment compensation under state or federal law. There are new forms that must be submitted to certify that the individual hired is a qualified long-term unemployment recipient. The Work Opportunity Tax Credit is a federal income tax credit incentive for private sector employers. An employer may be eligible for WOTC when they hire from certain target groups of job seekers who face employment barriers. The WOTC tax credit is a one-time tax credit for each new worker hired, and there is no limit to the number of new hires who can qualify an employer for a tax credit. Tax credits can range from $1,200 (for summer youth employment) up to $10,000 (for the hire of a service-connected disabled veteran). For more information about the Work Opportunity Tax Credit, or if you have questions on other tax issues, please contact the Gray, Gray & Gray Tax Department at (781) 407-0300.
