The Work Opportunity Tax Credit (WOTC) applies to employees hired after December 31, 2006 and those hired before December 31, 2011. The new employee may not have worked for the employer at any time in the past and may not be a dependent or relative of the employer.
The new employee must belong to any one of the following nine targeted groups:
Target Group A - AFDC/TANF recipient. Is a member of a family that is receiving or has received Temporary Assistant to Needy Families (TANF) for any 9-month period during the 18 month period ending on the hiring date.
Target Group B - Qualified Veteran. A veteran who is a member of a family that is receiving or recently received Supplemental Nutrition Assistance Program (SNAP) assistance for a three-month period during the 15-month period ending on the hiring date.
For the newly established sub-group disabled veteran, it is a veteran who:
is entitled to compensation for a service-connected disability and has a hiring date not more than one year after discharge or release from active duty.
or
has been unemployed for a period of six aggregate months during the one-year period ending on the hiring date.
Target Group C - Qualified Ex-felon. Is an individual convicted of a felony and who has a hire date not more than 12 months after the last date of conviction or release from a correctional facility.
Target Group D - Designated Community Residents. Formerly designated as the High-Risk Youth Target Group. Is an individual who is 18 but not yet 40 years old on the hire date and who lives within an Empowerment Zone (EZ, an Enterprise Community (EC), or a Rural Renewal County (RRC). South Dakota has 24 counties. For more information on EZ/EC/RRC locations, visit the Department of Housing and Urban Development (HUD) website. South Dakota Rural Renewal counties are: Aurora, Campbell, Clark, Day, Deuel, Douglas, Faulk, Grant, Gregory, Haakon, Hand, Harding, Hutchinson, Jones, Kingsbury, McPherson, Marshall, Miner, Perkins, Potter, Sanborn, Spink, Tripp and Walworth Counties.
Target Group E - Vocational Rehabilitation Referral. Is an individual with a physical or mental disability who has completed or is completing rehabilitative services from a State agency, an Employment Network, or the Department of Veterans Affairs, with a written work plan. Those that are Ticket to Work holders from the Social Security Administration are included in this target group.
Target Group F - Summer Youth Employee. Are Youth ages 16 and 17 years of age who reside in an Empowerment Zone in South Dakota. South Dakota has one Empowerment Zone, the census tracts of the Oglala Sioux-Pine Ridge Empowerment Zone.
Target Group G - Supplemental Nutrition Assistance Program (SNAP) Recipient. Is an individual at least 18 years of age but not yet 40 years of age and is a member of a family that is receiving or recently received at least six months of Supplemental Nutrition Assistance Program (SNAP) in the last six months prior to their hire date. Or if their SNAP case file is closed and they are an Able Bodied Adult Without Dependants (ABAWD) they must have received any three months of SNAP in the last five months ending on their hire date.
Target Group H - Supplemental Security Income (SSI). Is an individual who has received SSI benefits within the 60 days prior to their hire date.
Target Group I - Long-Term Family Assistance (LTFA) recipient. Is a member of a family that is receiving or recently received TANF payments for 18 consecutive months ending on the hire date; OR received these payments for at least 18 months after 1997 and has a hiring date of not more than two years after the 19-month period; OR stopped Target Group I. Long-Term family assistance (LTFA) recipient. Is a member of a family that is receiving or recently received TANF payments for 18 consecutive months ending on the hire date; OR received these payment for at least 18 months after 1997 and has a hiring date of not more than two years after the 19-month period; OR stopped being eligible for these payment after August 1997 because of Federal or state law and has a hiring date of not more than two years after eligibility expired.
Those who do not qualify for the WOTC
No tax credit can be claimed for wages paid to relatives.
No tax credit can be claimed for federally subsidized on-the-job-training; however, wages paid after the subsidy expires can qualify for the tax credit.
No Individual who is a re-hire of the employer requesting the credit is eligible.
700 Governors Drive
Pierre, SD 57501-2291
Tel. 605.773.3101
Fax. 605.773.6184
