6-8-11 Work Opportunity Credit Extended Through 2011 |
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Work Opportunity Tax Credit Extended Through 2011
The work opportunity tax credit (WOTC) promotes employers to hire employees from certain targeted groups to help stimulate the economy. The credit provides a reduction of income taxes. It is a percentage of up to $6,000 of the first-year of wages for each employee ($12,000 for qualified veterans; and $3,000 for qualified summer youth employees). The incentive is larger when the employee is a long-term family assistance (LTFA) recipient. The WOTC is a percentage of first and second year wages, up to $10,000 per employee. The calculation is as follows: * 40% of the first-year qualifying wages *25% for employees who have completed at least 120 hours, but less than 400 hours of service for the employer * For LTFA recipients, it includes an additional 50% of qualified second-year wages.
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