The Work Opportunity Tax Credit (WOTC), a federal tax credit, encourages employers to hire jobseekers in ten target groups thereby reducing employers' federal income tax liability by as much as $2,400 for each new adult hire; $1,200 for each new summer youth hire; and $ 9,000 foreach new long-term family assistance recipient hired over a two-year period. As a part of the American Recovery & ReInvestment Act signed on February 9, 2009, the WOTC was expounded to include two additional target groups as well as provide for up to $4,800 tax reduction for each new disabled veteran hire.

The previous ten target groups included: a member of a family that received Temporary Assistance for Needy Families (TANF) for at least 18 consecutive months ending on the hire date or for any 18 months begining after August 5, 1997 or stopped being eligible due to maximum time limits; a member of a family that received TANF payments for any 9 months during the 18 month period ending on the hire date; An 18-39 year old member of a family that is receiving or received Food Stamps; An 18-39 year old resident of an Enterprise Zone; a 16-17 year old Enterprise Zone resident hired between May 1 and September 15 as a Summer Youth Employee; A veteran who is a member of a family that is receiving or recently received Food Stamps; A Vocational Rehabilitation referral who completed or is completing rehabilitative services from a State certified agency, an Employment Network or the US Department of Veteran Affairs; An ex-felon; and A recipient of Supplemental Security income (SS) benefits.

One of the new target groups looks at for coverage of any veteran hired after 2008 and before 2011 who is certified as having been discharged and/or released from active duty at any time during the 5-year period ending on the hire date and having received unemployment compensation under State or Federal law for less than four weeks during the one-year period ending on the hire date.

The second new target group speaks to disconnected youth who is certified as having attained age 16 but not age 25 on the hiring date, is not attending any secondary, technical or post-secondary school during the 6-month period preceding the hiring date, was not regularly employed during the same 6-month period and is not readily employable by reason of lacking a sufficient number of basic skills.

For more information, you can visit the US Department of Labor website by clicking here.