The Tennessee Department of Labor & Workforce Development announced this week that our state’s employers utilized the Work Opportunity Tax Credit (WOTC) during the federal fiscal year ending September 2012 for record levels of potential federal income tax savings. In FY2012, Tennessee Department of Labor & Workforce Development issued 64,300 WOTC tax credit certifications to Tennessee employers, which represented a potential federal income tax savings in excess of $232 million for these employers.
How the WOTC works, according to the TN.gov website:
When an employer hires an employee who is from one of 13 targeted groups with significant barriers to employment, he completes two forms – an IRS form and a federal Department of Labor form – and sends those to the Tennessee Department of Labor & Workforce Development no later than 28 calendar days following the employee’s starting date of employment. The TN Department of Labor notifies the employer via a tax credit certification when the employee is certified as an eligible target group member, and the employer then claims the credit as part of his annual tax return with the IRS. The amount of the tax credit is based on the percentage of qualified wages relating to the target group of the new employee.
For more information, visit the Work Opportunity Tax Credit page on the Tennessee Department of Labor & Workforce Development website.