Bob TaftTom Hayes

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The Welfare-to-Work Tax Credit Work Opportunity
Tax Credits Two Employer-Friendly Benefits For
Hiring Job Seekers Most In Need Of Employment

• Bob Taft Tom Hayes
• Governor Director

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WtW And WOTC

• Employers make the hiring decision.
• There are no limits to the number of new hires
• who can qualify an employer for the tax
  savings.
• There is minimal paperwork needed to claim the
• tax credit.

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WtW AND WOTC

• Part of the Job Creation and Worker Assistance
  Act of 2002
• Federal income tax credits for private sector
  employers
• WtW applies to new hires between 1-1-98 and
  12-31-03 WOTC applies to new hires between
  10-1-96 and 12-31-03.
• WtW tax credit is 8,500 for each new hire WOTC
  tax credit is up to 2,400 for each new hire.
• Administered by ODJFS

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WtW TAX CREDIT

• 35 of qualified wages for the first year of
• employment and 50 of qualified wages for
• the second year
• Qualified wages are capped at 10,000 per
• year
• New hires must be employed at least 400
• hours or 180 days

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WOTC TAX CREDIT

• 40 of qualified first year wages for those
• employed 400 or more hours
• 25 for those employed at least 120 hours
• Qualified wages are capped at 6,000

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SUMMER YOUTH TAX CREDIT

• Must begin work on or after January 1, 2001 and
  before January 1, 2004
• Qualified wages are capped at 3,000

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LONG-TERM ASSISTANCE RECIPIENT
Member of a family that received TANF benefits
for at least 18 consecutive months ending on the
hire date or Has received family assistance
for at least 18 months (whether or not
consecutive) after August 5, 1997 and has a
hiring date within two years of the end of the
earliest 18 month period of eligibility or
Whose TANF eligibility expired under a federal or
state law after August 5, 1997, and who was hired
within two years after eligibility expired.
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TANF RECIPIENT

• Member of a family that received TANF
  benefits for any 9 months during the 18 month
  period ending on the hire date

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VETERAN

• Served on active duty in the Armed Forces for a
  period of more than 180 days, and
• Member of a family receiving Food Stamps for, at
  least, a 3 month period within the last 15 month
  period, ending on the hire date

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EX-FELON

• Individual convicted of a felony and
• Member of a low income family and
• Hired within one year of conviction date or
  release from prison

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HIGH RISK YOUTH

• Age 18, but not yet age 25 on the hire date, and
• Living in a federally designated empowerment zone

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VOCATIONAL REHABILITATION REFERRAL

• An individual who has a physical or mental
  disability resulting in a handicap to employment
  and
• Referred to employer upon completion of, or while
  receiving, services under a state plan for
  vocational rehabilitation services

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SUMMER YOUTH EMPLOYEE

• Age 16 but not yet 18 on the hire date and
• Performed a service for the employer between May
  1 and September 15 and
• Principal place of abode is within an
  empowerment zone

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FOOD STAMP RECIPIENT

• Age 18 but not yet age 25 on the hire date and
• Member of a family that received Food Stamp
  assistance for the 6 months ending on the hire
  date or, at least, 3 of the 5 months ending on
  the hire date

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SSI RECIPIENT
Individual who receives Supplemental
Security Income (SSI) benefits for any month
during the 60 days ending on the hire date
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THREE EASY STEPS FOR CERTIFICATION

• Complete the one-page IRS Form 8850 by the date
  the job is offered. Mail the signed and dated
  8850 to ODJFS not later than 21 days after the
  new hires employment start date.
• Complete the one-page ETA 9061 form.
• Submit any supporting documentation required.

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SUPPORTING DOCUMENTATION

• Employers are responsible for obtaining and
  submitting any supporting documentation required
  for the target group requested. Examples of
  acceptable documentation are listed on the back
  of the ETA 9061 form.
• ODJFS can verify benefits for TANF, Food Stamps
  and Welfare-to-Work (and SSI when it is in
  combination with any of these three target
  groups) by accessing the state welfare registry.
  No supporting documentation is required from the
  employer.

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INELIGIBLE FOR THE WtW WOTC TAX CREDITS

• Employers not covered by FUTA
• Wages paid to relatives
• Non-qualifying re-hires
• Federally subsidized on-the-job training positions

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IRS FORM 8850 (Front)
EmployeesName, Address Zip Code
Employees Social Security
123 45 6789
John Smith
123 Anywhere Lane
Columbus, Oh. 55555
111 222 3333
11 01 75
Telephone
Date Of Birth
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Target Group Member
21
Target Group Member
01 17 03
John Smith
Applicant Signature Date
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IRS FORM 8850 (Back)
Employer Telephone
Federal Employer I.D.
Employer Name, Address Zip Code
ABC Company
123 456 7890
12 3456789
111 Run Around Circle
Columbus, Oh. 55555
Jane Smith
098 765 4321
Contact Person Telephone
DATES
Interview
Job Offer
01 02 03
01 10 03
01 10 03
01 12 03
Job Starting
Jane Smith
President
01 17 03
Hiring
EmployerSignature, Title Date
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ETA 9061
Employer I.D. Number
Start Date, StartingWage Position
Employer Name Address
START
01 -17 -03
12-3456789
ABC Company111 Run Around CircleNeedmore, Oh.
55555
6.00
Packager
John Smith
123-45- 6789
EmployeeSocial Security Number
Employee Name
Has Employee Worked Here Previously?
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Target GroupB
Target GroupA
Target GroupD
Target GroupG
Target GroupF
Target GroupE
Target GroupH
Target GroupC
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WtW Target Group
Jane Smith
01- 17- 03
Signature Date
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Mail the signed and dated IRS Form 8850, ETA 9061
and Supporting Documentation to Ohio
Department of Job Family Services Bureau of Tax
Credit Services WOTC/WtW Section, 2nd Floor 145
South Front Street Columbus, Ohio 43215-4156
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ADDITIONAL TAX CREDIT PROGRAMS
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EARNED INCOME TAX CREDIT (EITC)

• Federal income tax credit for people who work and
  have earned income under 34,178
• Reduces the amount of tax you owe or may give you
  a refund
• For more information
• http//irs.gov/individuals/article/0,,id96456
  ,00.html

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OHIO TRAINING TAX CREDIT (OTTC) PROGRAM

• BENEFIT TO OHIO EMPLOYERS
• Online application process 20 million available
  for 2004.
• Tax credit up to 100,000 a year to help offset
  the cost of training incumbent (employed more
  than 180 days) workers
• Nonrefundable credit against the tax imposed by
  Section 5733.06 ORC.
• For Corporations, financial institutions,
  partnerships, S-corps, llcs, domestic or foreign
  insurance cos, and dealers in intangibles
• Next opportunity to apply - January 1, 2004
• Offered on a first come/first served basis
• For more information www2.state.oh.us/odjfs/ottc
  /info/

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FOR ADDITIONAL INFORMATION
Telephone [phone] E-mail
wotc_resource_at_odjfs.state.oh.us Fax
614-728-7299 Website www.state.oh.us/odjfs/wotc/
index.stm