How much is the Work Opportunity Tax Credit?
Companies who hire qualifying employees can earn between $1,200 and $9,600 per employee under the Work Opportunity Tax Credit. The amount varies based on who the business hires from the included groups.
For example, if you hire a youth employee in the target group for a summer position, you could receive a tax credit up to $1,200 for that hire. On the other end of the spectrum, if you hire a qualified veteran, you could receive a tax credit of up to $9,600.
The amount of the tax credit you can receive is based on certain factors, including:
- The target group of the individual
- Duration of unemployment
- Wages paid to the incoming worker
- How many hours the employee works in their first year of employment
There is no cap on the number of target group employees a business can hire. So the more qualifying employees you hire and retain, the higher your tax credit will be (woo!).