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Tax breaks available for hiring long-term unemployed workers and more 

Jul 27, 2021 | Reopening 2021

It seems like everyone is hiring right now and many employers would be happy hiring any candidate. But did you know that hiring from certain target groups can provide you with up to $9,000 for two years of employment? The Work Opportunity Tax Credit (WOTC) is a federal tax incentive that you can claim for every eligible employee with no limit.  

The WOTC is a federal tax incentive, but each state has a coordinator that assists with the credit. In Washington state, the Employment Security Department (ESD) has additional information and resources for applicants.  

Generally, the following groups are eligible for the tax credit:  

  • Public assistance recipients that meet SNAP (food stamps), Temporary Assistance for Needy Families, (TANF) or long-term TANF requirements 
  • Military veterans 
  • Formerly incarcerated individuals hired within a year after their date of conviction, work release or release from prison or jail 
  • People with disabilities participating in state or federal vocational-rehabilitation programs who had an “individual written plan” for employment in the last two years 
  • Anyone who received Supplemental Security Income (SSI) for any month in the last 60 days 
  • Long-term unemployed individuals hired on or after Jan. 1, 2016 (must have been unemployed at least 27 consecutive weeks 

The WOTC is not a new incentive (the federal program was created in 1996), but the current job climate makes the program especially relevant. Individuals who have been unemployed for at least 27 weeks are eligible for the credit. And individuals in that situation are increasingly common as workers begin to look for jobs after long periods of unemployment and furlough caused by the pandemic.  

Employers or their representatives must submit applications within 28 days of the job start date. You can apply for the credits online and will need your SecureAccess Washington (SAW) account. You will also need a WOTC account, which can be created by navigating from eServices to the WOTC sign-in page and selecting new employer or new representative.”  The ESD has additional information on how to apply here and the National Restaurant Association has a factsheet available here.