Two federal programs that provide substantial tax credits to employers who hire members of qualified groups have been extended, according to the Kentucky Office of Employment and Training, which administers the programs in Kentucky. The office is an agency of the Kentucky Education Cabinet.

The Work Opportunity Tax Credit (WOTC) and Welfare-to-Work (WtW) Tax Credit programs were extended by the federal government through Dec. 31, 2007, and made retroactive to Dec. 31, 2005.

WOTC provides employers with up to a $2,400 tax credit per eligible hire for individuals who meet certain criteria. Among those eligible for the WOTC program are certain welfare, food stamp, and Supplemental Security Income (SSI) recipients; youth who live in areas designated as federal empowerment zones and enterprise communities; ex-felons; and people with disabilities. 

The WtW Tax Credit program provides employers with a maximum $8,500 tax credit per eligible hire for individuals who are long-term welfare recipients.

To qualify for the tax credits, the employer must submit a form to OET requesting certification within 28 days of the eligible worker’s first day of employment and receive from OET a form certifying that the individual was eligible when hired. Employers may not claim the tax credits for hiring former employees or relatives.

The actual amounts of the tax credits for both programs are based upon wages paid and length of time the worker is employed.

For more information about the WOTC and WtW Tax Credit programs, employers can contact state coordinator Barbara Gilley at (502) 564-7456.

OET is an agency of the Department for Workforce Investment in the Education Cabinet. The primary services of the office are to help individuals prepare for, secure, and maintain employment; assist employers in locating and selecting the best qualified workers for their job openings; and provide income maintenance to ease the financial burden on individuals who are out of work through no fault of their own.

The Kentucky Education Cabinet coordinates learning programs from P-16, and manages and supports training and employment functions in the Department for Workforce Investment. For more information about our programs, visit www.educationcabinet.ky.gov or www.workforce.ky.gov, or call 502-564-6606.

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