The Work Opportunity Tax Credit (WOTC) was first enacted as part of comprehensive welfare reform in 1996: as welfare recipients were being pushed into the job market, there was a need to encourage employers to incur the additional costs of hiring and training individuals who may face significant barriers to enter the workforce because they have never been employed or succeeded in the workforce.
Because of its core mission, during the first few years of the program, close to 90% of participating individuals were from households receiving Temporary Assistance to Needy Families (TANF) Food Stamps, or other Title IV-A services. As welfare reform succeeded and evolved, WOTC was expanded to become a vehicle for encouraging employment for other groups that historically have had difficulty entering and remaining in the workforce. In 2010, about 68 % of WOTC employees were on public assistance programs including welfare, food stamps, and SSI. 32% came from other target groups.
- Qualified TANF Recipients
- Qualified Long-Term TANF Recipients
- Qualified SNAP Benefit Recipients (Food Stamp)
- Designated Community Residents
- Supplemental Security Income (SSI)
- Vocational Rehabilitation Referrals
- Qualified Ex-Offenders
- Qualified Veterans
- Summer Youth Employees
- The Long-Term Unemployed
Over the years, there has been some addition of temporary target groups to address specific challenges, such as ‘Disconnected Youths’ and those impacted by natural disasters such as Hurricanes Katrina and Sandy, as well floods in the Midwest. NEON is currently working to get WOTC expanded to include the Supplemental Security Disability Insurance recipients, residents of Opportunity Zones, foster youth, and lifting the current age ceiling on recipients of Food Stamps.