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Small Businesses in the U.S. Hiring According to the WOTC

Employment expansion was not continued by small businesses in USA during 2009. A programme was designed by the Work Opportunity Tax Credit (WOTC) for hiring individuals of disadvantaged groups and backgrounds. Recipients of temporary assistance for needy families, food stamp recipients, and disabled or unemployed veterans were included in these groups.

Several restrictions were mentioned for eligibility to be hired by the WOTC. However, appropriate tax benefits were provided. Tax credits of up to $2,400 was provided for each new adult hire. Up to $1,200 was provided for each summer youth hire. Each new disabled veteran hire was offered with tax credit up to $4,800. The tax credit was up to $9,000 for each new long-term TANF recipient hired over a two-year period. Apart from the federal tax incentives, state credits are also offered by 39 states for employing people from disadvantaged groups.

Qualification of new adult employees was based on the rule that they should work for 120 hours. The qualification for summer youth employees was that they should work for at least 90 days from 1st of May to 15th of September. Tax bills can be saved by hiring employees from such groups. However, the cost of hiring an employee was not covered by the Work Opportunity Tax Credit. So a person should not be hired just to order or claim the credit.

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