Tennessee Issues Record Number of Work Opportunity Tax Credits in 2016

Tuesday, January 10, 2017 | 9:34am

Employers Save Over $225 Million in Tax Liability

NASHVILLE - The Workforce Services Division of the Tennessee Department of Labor and Workforce Development (TDLWD) issued a record number of Work Opportunity Tax Credits (WOTC) to Tennessee employers during 2016.

From January 1 through December 31, 2016 TDLWD issued 85,448 WOTC certifications, which accounts for $225,395,200 in employers’ potential tax savings, the largest amount in the program’s history. 

The number of certifications has grown steadily since the Department simplified the WOTC program process for employers in 2016 by transitioning to a more efficient and user-friendly online application. Not only did this expedite the process, it also eliminated the use of more than 700,000 pieces of paper each year.

“This tax credit is a benefit many business owners are unaware of and may forsake thousands of dollars in tax bill savings each year,” said TDLWD Commissioner Burns Phillips.

The Work Opportunity Tax Credit program is designed to assist Tennesseans of select targeted groups who have consistently faced significant employment barriers with re/entering the workforce.  The program provides federal tax credit incentives, ranging from $1,200 - $9,600, to employers for hiring these individuals.

WOTC Targeted Groups

Targeted groups include: long-term unemployed, veterans, Supplemental Nutrition Assistance Program (SNAP) recipients, ex-felons, vocational rehabilitation participants, Social Security Insurance recipients, Temporary Assistance for Needy Families (TANF) recipients, as well as several other groups.  

SNAP recipients garnered the largest number of certifications in 2016.  The state issued 74,155 WOTC certifications on behalf of this group with $177,972,000 in potential tax savings for Tennessee employers.  The second largest group is TANF recipients with 2,702 certifications, valued at $24,318,000.  Ex-felons made up the third largest group with 2,570 WOTC certifications and a potential tax savings of $6,168,000.  Another critical target group is comprised of Tennessee veterans.  2,000 veterans went to work in 2016 because of the WOTC and employers saved $7,326,400.

“This program is a win-win situation for Tennessee employers and workers.  It puts folks having a difficult time finding work into new jobs and reduces the business owners’ tax liability,” Commissioner Phillips said.  “We hope more employers take advantage of the WOTC program, surpassing last year’s numbers.”

The WOTC is a federally funded program and Congress designates which targeted groups are eligible for the credit.

 

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Labor & Workforce Development