Work Opportunity Tax Credit Program Purpose:
To provide a federal income tax credit to businesses for hiring from nine targeted groups with barriers to employment.
How The Program Works:
The Division of Workforce Development administers the program in the State of Missouri. Qualifying new hires must be one of the following target groups:
- Short-term Welfare recipients
- 18-39 year-old Food Stamp recipients
- Veterans receiving Food Stamps or a disabled veteran
- Vocational Rehabilitation referrals
- 18-39 year-old Empowerment Zone or Rural Renewal County residents
- 16-17 year-old Empowerment Zone residents hired as Summer Youth Employees
- Ex-Felons who have been convicted or released within one year of hire date
- Supplemental Security Income recipients
- Long Term Family Assistance Recipient
Eligible Areas:
Any private, for profit business statewide
Eligible Applicants:
For all target groups, with the exception of the Summer youth employee group, the Disabled Veteran and the Long Term Family Assistance Recipient, the tax credit is calculated at 40% of the first $6,000 of the first year's wages (for a maximum credit of $2,400) if 400 hours is reached. For employees who work at least 120 hours, but do not reach 400 hours, the credit is calculated at 25% of the first $6,000 of wages (for a maximum credit of $1,500).
The credit for Summer youth employees is calculated at 40% of the first $3,000 of the year's wages (for a maximum credit of $1,200) if 400 hours is reached. For employees who work at least 120 hours, but do not reach 400 hours, the credit is 25% of the first $3,000 of wages (for a maximum credit of $750).
The credit for the Disabled Veteran is calculated at 40% of the eligible employees first $12,000 in wages for the first year (up to a maximum credit of $4,800) if 400 hours of employment is reached. For employees who work at least 120 hours, but less than 400 hours, the credit is calculated at 25% of the employees first $12,000 in wages for the first year (up to a maximum credit of $3,000).
The credit for the Long Term Family Assistance Recipient is 40% of the first $10,000 of the first year's wages (for a maximum credit of $4,000) and 50% of the first $10,000 of the second year's wages (for a maximum credit of $5,000). The maximum amount of credit for the 2 years combined is $9,000.
Application Procedure/Approval Method:
A business will submit Form 8850, "Pre-Screening Notice and Certification Request" to DWD no more than 28 days after the employee's first day of work. The business will also submit Form 9061, "Individual Characteristic" or Form 9062, "Conditional Certification" which may be submitted at the same time as the Form 8850 or at a later date. DWD will review the Forms 8850 and 9061/9062 to determine the eligibility of the new hire. A certification or denial for the tax credit will be issued by DWD.
Eligible Use Of Tax Credits:
The tax credits may be used to offset federal income tax liability of the business. Unused credit may be carried back one year and carried forward 20 years.
Funding Limits:
There is no limit on the number of qualifying new hires per business or total amount of tax credits distributed per year.
Who to Contact:
For more information or to obtain forms contact the Division of Workforce Development at 800/877-8698 or 573/522-9581.
Forms may also be accessed by visiting the U.S. Department Of Labor's website at http://www.doleta.gov/business/incentives/opptax/
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