Work Opportunity Tax Credit
Credit up to $9,600 for hiring individuals from targeted groups including veterans and ex-felons.
Estimate Your Savings
This is a simplified estimate. Actual savings depend on your complete tax situation.
Eligibility
Employers hiring from targeted groups
Requirements
- 1Must hire from qualifying groups
- 2Submit Form 8850 within 28 days
- 3Full-time employment required
Required Tax Forms
Understanding the Work Opportunity Tax Credit
Credit up to $9,600 for hiring individuals from targeted groups including veterans and ex-felons.
Tax credits directly reduce the amount of tax you owe, making them more valuable than deductions which only reduce taxable income. The Work Opportunity Tax Credit can reduce your tax liability by up to $9,600.
To claim this credit, you will need to file Form 5884 and Form 8850 with your annual tax return. Make sure you meet all eligibility requirements and keep documentation of qualifying expenses or activities.
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Frequently Asked Questions
What is the Work Opportunity Tax Credit?
Credit up to $9,600 for hiring individuals from targeted groups including veterans and ex-felons.
How much is the Work Opportunity Tax Credit worth?
The Work Opportunity Tax Credit is worth up to $9,600 per year. The average taxpayer saves approximately $2,400.
Who is eligible for the Work Opportunity Tax Credit?
Employers hiring from targeted groups. Key requirements include: Must hire from qualifying groups; Submit Form 8850 within 28 days; Full-time employment required.
What forms do I need to claim the Work Opportunity Tax Credit?
You will need to file Form 5884, Form 8850 with your tax return to claim this credit.
Is the Work Opportunity Tax Credit refundable?
Most business and energy tax credits are nonrefundable but can be carried forward to future tax years.
Can I claim the Work Opportunity Tax Credit with other tax credits?
Yes, in most cases you can claim the Work Opportunity Tax Credit along with other eligible tax credits. However, some credits have interactions that may reduce the benefit. Consult a tax professional for your specific situation.