The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who hire individuals from certain targeted groups that may face barriers to employment. These groups can include qualified veterans, qualified ex-felons, and other eligible workers.
The credit is designed to encourage businesses to expand job opportunities for individuals who may have difficulty finding employment.
What Must an Employer Do to Claim the WOTC?
To determine whether a new hire qualifies for the credit, both the employer and the job applicant must complete Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit.
This form is used to verify eligibility and must generally be submitted within the required timeframe after the employee begins work.
NOTE: Form 8850 is no longer in use. The work opportunity credit does not apply to employees who begin work for the employer after December 31, 2025. Employers claiming the credit previously used Form 8850 to pre-screen and make a written request to the state workforce agency to certify an individual was a member of a targeted group for the purposes qualifying for the work opportunity credit.
How Does an Employer Claim the WOTC in the Program?
If you're eligible to claim the Work Opportunity Tax Credit, follow these steps in the program:
Federal → Deductions (Select My Forms) → Credits → Less Common Credits → Work Opportunity Credit
Have your completed tax forms and supporting information available before entering the credit details.