If you’re interested in claiming a work opportunity Tax Credit (WOTC) on future employees, you’ll need to certify their eligibility with a State Workforce Agency (SWA) by asking candidates to complete the pre-screening form Form 8850. This form should determine whether they fall into one of ten target groups on whose wages you’re allowed to claim credit.
Lift HCM has helped businesses file for WOTC since the program’s inception. We’ll walk you through the requisite qualifications of the 10 WOTC target groups to give you a better idea of whether any current or future candidates are likely to qualify.
You must have completed the pre-screening form on or before a candidates offer date and submitted all relevant documentation to the appropriate SWA within 28 days of their start date. You’re eligible to begin claiming WOTC on federal quarterly taxes upon receipt of certification (of an employee’s eligibility) from the SWA. Finally, it’s worth noting that you can only claim WOTC for employees who started working on or before December 31 of 2025 (so clock’s-a-tickin’!).
Candidates on who whose wages you intend to claim WOTC must meet the qualifications listed for inclusion within any of the 10 target groups.
A veteran is considered to be anyone who meets the following two qualifications:
Those considered veterans by these standards must also meet any of the following qualifications:
An ex-felon must either have been convicted of a felony or have been released from prison for a felony within the past year.
Candidates qualify if they’ve received supplemental security income (SSI) during any month that ended within sixty days of their hiring date. This includes anyone receiving benefits as defined in section 1616 of the Social Security Act as well as section 212 of Public Law 93-66.
Applicants must belong to a family that received assistance from a program funded by title IV of the Social Security Act during any nine of the 18 months prior to their hiring date; this is to say, programs relating to Temporary Assistance for Needy Families (TANF).
The candidate is between the ages of 18 and 40 (as of their hiring date) and
The candidate has been unemployed for at least 27 consecutive weeks prior to their start date (or the day they completed their portion of Form 8850 as a pre-screener; whichever is earlier) and has received unemployment compensation for at least part of that time.
Candidates must meet any one of the following conditions:
The candidate possesses a physical or mental disability and is being referred to you, the employer, while receiving (or upon completing) rehabilitative services in accordance with:
The candidate must live in an Empowerment Zone (EZ)* and must be at least 16 years old, but under the age of 18 by their hiring date (or on May 1; whichever is later). They may only provide services to you, the employer, between May 1 and September 15 (meaning they could not have been employed by you prior to May 1). They also must never have worked for you before.
The candidate is between the ages of 18 and 40 (by their hiring date). Wages used to determine the credit must be earned for services performed while the candidate’s principle residence was within an Empowerment Zone (EZ)* or a Rural Renewal County (RRC)*.
* See Form 8850 for a full list of Empowerment Zones and Rural Renewal Counties in each state.
We hope this helps give you some idea whether the candidates you’re screening may qualify you to claim a work opportunity tax credit. If you know candidates for a role you've posted or plan to post qualify for WOTC, your next priority should be certifying their eligibility with the appropriate SWA in advance of filing a claim.
No matter how comprehensive or user-friendly our guides can be, there's no escaping the fact that filing a claim can be daunting. We've helped businesses like yours save money during tax season for decades. Our team of specialists is on call to help you navigate the process of claiming a work opportunity tax credit in case you need a Lift.