Department of Labor and Regulation

Title - Work Opportunity Tax Credit

Qualifying

The Work Opportunity Tax Credit (WOTC) applies to employees hired after December 31, 2006 and those hired before December 31, 2013 for all target groups except veterans.

A new employee must belong to any one of the following 14 targeted groups of individuals:

  1. IV-A TANF recipient - A member of a family that received Temporary Assistance to Needy Families (TANF) benefit payments for any nine months during the 18-month period ending on the hiring date.
  2. Veterans

2A - Veteran receiving Supplemental Nutrition Assistance Program (SNAP) benefits (V): A veteran who has received SNAP benefits for any three-month period in the past 12 months.

2B - Disabled Veteran (DV): A veteran discharged from the military in the last 12 months for a service-connected disability.

2C - DV Unemployed for six months: A veteran discharged from the military in the last 12 months for a service connected disability and has been unemployed for any six months in the last 12 months.

2D - V Unemployed for four weeks: A veteran who has been unemployed for four weeks but less than six months during the year before he/she was hired.

2E - V Unemployed for six months: A veteran who has been unemployed for six months or more during the year before he/she was hired.

  1. Ex-felon: A person who was convicted or released from prison in the last 12 months after a felony conviction.
  2. Summer Youth: A person 16 to 17 years of age that live in an Empowerment Zone and work for an employer between May 1 and September 16.
  3. Designated Community Resident: Any person older than 18 but not yet 40 years of age who lives in any one of 24 Rural Renewal Counties in SD or the Empowerment Zone of Oglala Sioux Tribe Pine Ridge Indian Reservation.
  4. Vocational Rehabilitation Referral:

    a. 6a. Voc Rehabilitation Referral: An individual referred by a vocational rehabilitation agency either through the state or the Department of Veterans Affairs Vocational Rehabilitation Center.

    b. 6b. Ticket Holder: An individual referred by an employment network under the Ticket to Work program.
  5. SNAP Recipient: A member of a family who is older than 18 but not yet 40 years of age and has received Supplemental Nutrition Assistance Payments (SNAP) for the last six month prior to the hiring date OR the person's case file is closed and he or she is an able bodied adult without dependents (ABAWD) and has received SNAP payments for a three consecutive month period in the last five months ending on the hiring date.
  6. SSI Recipient: Individual who has received a Supplemental Security Income (SSI) benefit payment for any month ending within 60 days of his or her hiring date.
  7. Long-Term TANF: A member of a family that received TANF assistance each month for the last 18 months ending on the hiring date.

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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.

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Marcia Hultman, Secretary
700 Governors Drive
Pierre, SD 57501-2291
Tel. 605.773.3101
Fax. 605.773.6184