Payroll

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 eligible groups.

For example, if you hire a youth employee for a summer position, you could receive a tax credit of 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 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!).

This article provides general information and shouldn’t be construed as tax advice. Since tax rules may change over time and can vary by location and industry, please consult a CPA or tax advisor for advice specific to your business.