Work Opportunity Tax Credit (WOTC)

§ 51. Amount of credit(a) Determination of amountFor purposes of section 38, the amount of the work opportunity credit determined under this section for the taxable year shall be equal to 40 percent of the qualified first-year wages for such year. (b) Qualified wages definedFor purposes of this subpart—(1) In generalThe term “qualified wages” means the wages paid or incurred by the employer during the taxable year to individuals who are members of a targeted group. (2) Qualified first-year wagesThe term “qualified first-year wages” means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer. (3) Limitation on wages per year taken into accountThe amount of the qualified first-year wages which may be taken into account with respect to any individual shall not exceed $6,000 per year ($12,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(I), $14,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(iv), and $24,000 per year in the case of any individual who is a qualified veteran by reason of subsection (d)(3)(A)(ii)(II)). (c) Wages definedFor purposes of this subpart—(1) In generalExcept as otherwise provided in this subsection and subsection (h)(2), the term “wages” has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section). (2) On-the-job training and work supplementation payments(A) Exclusion for employers receiving on-the-job training paymentsThe term “wages” shall not include any amounts paid or incurred by an employer for any period to any individual for whom the employer receives federally funded payments for on-the-job training of such individual for such period. (B) Reduction for work supplementation payments to employersThe amount of wages which would (but for this subparagraph) be qualified wages under this section for an employer with respect to an individual for a taxable year shall be reduced by an amount equal to the amount of the payments made to such employer (however utilized by such employer) with respect to such individual for such taxable year under a program established under section 482(e) 11 See References in Text note below. of the Social Security Act. (3) Payments for services during labor disputesIf—(A) the principal place of employment of an individual with the employer is at a plant or facility, and (B) there is a strike or lockout involving employees at such plant or facility, the term “wages” shall not include any amount paid or incurred by the employer to such individual for services which are the same as, or substantially similar to, those services performed by employees participating in, or affected by, the strike or lockout during the period of such strike or lockout.