WOTC Questions: Calendar Year of Employment

Does the first year of employment have to fall within a calendar year?

At CMS, as WOTC experts and service providers since 1997, we receive a lot of questions via our website. In the case of the above question, the sender did provide their email address, so we were able to reply directly to them. This is one of the more common questions (FAQ), so we thought we would share, and hopefully will help others too.

CMS’s Work Opportunity Tax Credits subject matter expert, Brian Kelly, tells us: “Because WOTC tax credits are calculated from the employees hire date fiscal year, many companies work on when the tax credit is fully realized, meaning when the employee is terminated or when the employee meets the maximum values for the credit.”

Eligible employees must work a minimum of 120 hours in order for you to receive a 25% tax credit, or 400 hours to receive the 40% tax credit. The limit and value depends on the target group category, and can vary from $2,400 to $9,600. (Calculate Your Potential Credit).

See More Tips to Maximize WOTC Tax Credits

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