WOTC Questions: Can a non-profit hire under the WOTC Tax Credit?

At CMS, as Work Opportunity Tax Credit (WOTC) experts and service providers since 1997, we receive a lot of questions via our website’s chat box that we try to answer:

Can a non-profit hire under the WOTC Tax Credit?

CMS Says:  Since non-profit organizations do not pay Federal taxes they are not eligible to participate in the Work Opportunity Tax Credit. However, qualified tax-exempt organizations described in IRC Section 501(c) and exempt from taxation under IRC Section 501(a), may claim the credit for qualified veterans.

Qualified Veteran
A “qualified veteran” is a veteran who is any of the following:

  • A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (SNAP) (food stamps) for at least 3 months during the first 15 months of employment.
  • Unemployed for a period totaling at least 4 weeks (whether or not consecutive) but less than 6 months in the 1-year period ending on the hiring date.
  • Unemployed for a period totaling at least 6 months (whether or not consecutive) in the 1-year period ending on the hiring date.
  • A disabled veteran entitled to compensation for a service-connected disability hired not more than one year after being discharged or released from active duty in the U.S. Armed Forces.
  • A disabled veteran entitled to compensation for a service-connected disability who is unemployed for a period totaling at least six months (whether or not consecutive) in the one-year period ending on the hiring date.

See IRS Notice 2012-13 (PDF) for more detailed information.

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