WOTC Questions: Do (Unpaid) Training Hours Count Towards WOTC?

At CMS, as Work Opportunity Tax Credit “WOTC” subject matter experts and service providers since 1997, we receive a lot of questions via our website and through the webcasts we attend. This week’s WOTC Question comes from one of our webinars:

Do (Unpaid) Training Hours Count Towards WOTC?

CMS says unpaid training does not count towards WOTC, however, the hours worked during training can be applied to the minimum retention period (120 hours). The Department of Labor tells us:

Wages include all remuneration paid to an employee. However, to qualify, the wages must be:

  • Wages for which the employer pays Federal Unemployment Tax Act (FUTA) taxes
  • Wages actually paid by the employer, including those to on-the-job training (OJT) participants.

If the On-the-job-training worker is receiving subsidized wages directly from another party, or indirectly paid through the employer, then the wages do not qualify (although the hours worked for the employer count for the minimum retention period).

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