Work Opportunity Tax Credit - A Federal Tax Credit for Employers - Workforce Development & Adult Learning
DLLR is proud to have incorporated its own Work Opportunity Tax Credit electronic system. Those accessing our system for the first time will need to request an account before applications are entered or uploaded.
The following WOTC program target groups have been authorized from January 1, 2015 to December 31, 2019.
- Recipients of Temporary Assistance for Needy Families (TANF)
- Designated Community Residents (DCR) 18-39 years of age
- Vocational Rehabilitation Referrals
- Summer Youth
- SSi Recipient
- Food Stamp Recipient
- Long-term unemployed person
Employers and agents who require assistance to understand the definitions for these target groups can check the federal website.
Assisting to understand the required documents
IRS form 8850 is used:
- To determine whether an applicant appears to fall into an eligible target group for the tax credit; AND
- To formally request that a State Workforce Agency (SWA) - in this case the Maryland State Department of Labor, Licensing, and Regulation (DLLR) - certify the applicant’s eligibility. This form should be presented to the employer on the day of the applicant’s job offer, interview, or prior to the interview.
Individual Characteristics Form (9061) - (for job seekers served by a SWA or where the process is initiated by the employer): This form is used in conjunction with the Prescreening Notice & Certification Request form to determine tax credit eligibility and request certification from DLLR. Documentation supporting the individual’s eligibility must be submitted before this form can be processed and final certification issued.
IRS Form 9175 must be used for the Long-Term Unemployed
Directions for completing these forms can be found on the federal website.
Participants are encouraged to submit all forms at once to expedite the process.
Employer Certification Form (481-B) is issued by DLLR following review of the appropriate above documents. This form constitutes final certification of a candidate's eligibility for the WOTC program.
Employers and Agents
When the job offer is made, all employer information must be completed on the Pre-Screening Notice & Certification Request Form (8850). The form, signed by both the applicant and the employer, must then be sent to DLLR with a postmark on or before the 28th day of employment.
If the Individual Characteristics Form (9061) is used, it needs to be sent as soon as possible to DLLR (preferably sent with the Pre-Screening Notice). This form needs to be attached to applicant eligibility documentation or specify what documentation will be sent.
Employer should be reminded to obtain IRS Form 5884 to claim the credit on their tax returns.
Once the employer receives certification, the employer should retain the certification as proof of eligibility to obtain credit.
Agents may offer assistance by applying online as outlined above or sending paper forms to DLLR for the employer. The Certifying Agency, DLLR, will provide final certification of a job seeker’s eligibility for the WOTC program.
- DLLR will determine the job seeker’s eligibility after receiving the Pre-Screening Notice and either the Individual Characteristics Form (along with eligibility documentation).
- If eligibility is approved, DLLR will then issue the Employer Certification Form to the employer.