Financial Incentives  
Federal Tax Incentives

The Work Opportunity Tax Credit (WOTC) created in 1996 and the Welfare-to-Work Tax Credit (WtWTC) created in 1997, are incentives that the Congress provides to private-sector employers for hiring economically disadvantaged individuals with significant barriers to employment. As employers participate in these two tax credits they find out that:

• it is the employer who makes the hiring decision
• there are no restrictions on the number of qualified new individuals he/she can hire
• they can claim up to $8,500 in potential tax credits
• the credits are applied to taxes due to the Internal Revenue Service and unused tax credits may be carried over to the next tax year

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