American Job Centers

 

Welfare-to-Work Tax Credit

 

The Welfare-to-Work Tax Credit for hiring long-term recipients can be as much as $8,500 per new hire: 35% of qualified wages for the first year, and 50% of qualified wages for the second year of employment.

Qualified wages: which include tax exempt amounts received under accident and health plans, as well as educational and dependent assistance programs - are capped at $10,000 per year. To qualify employers for this tax credit, new hires must begin work at any time after December 31, 2006, and before September 1, 2011, and must be employed at least 400 hours or 180 days.

Hiring Any of These Individuals Will Qualify You for the Welfare-to-Work Tax Credit

Long-term welfare recipients who are:

  • Members of a family receiving Temporary Cash Assistance (TCA) for at least 18 consecutive months before the date of hire
  • Members of a family whose eligibility to receive benefits has expired under federal or state law since August 5, 1997
  • Members of a family which have received benefits for any 18 months since August 5, 1997.

Applying for Certification is Quick and Easy

Employers must apply for and receive certification from the Maryland Tax Credit Unit for each new hire before they can claim a credit on their Federal Income Tax Return.

Complete the one-page IRS form 8850, "Pre-Screening Notice and Certification Request" by the date of the job offer, and either the one-page U.S. Department of Labor:

ETA Form 9061, PDF document, download Adobe Acrobat for free; "Individual Characteristics Form", or

ETA Form 9062; "Conditional Certification Form", if provided to the job seekers.

Mail the signed IRS and ETA forms to the State Tax Credit Unit at:

WOTC and/or Welfare-to-Work Tax Credit
1100 N. Eutaw Street, Room 201
Baltimore, Maryland 21201

Note: The IRS form must be postmarked no later than 21 days after the new hire’s date.

To get the necessary forms or Internet address to download forms, call Belinda Duncan at (410) 767-2047.