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Work Opportunity Tax Credit - A Federal Tax Credit for Employers - Workforce Development & Adult Learning

The Maryland Department of Labor is proud to have incorporated its own Work Opportunity Tax Credit electronic system. Those accessing our system for the first time will need to request an account before applications are entered or uploaded.

The following WOTC program target groups have been authorized from January 1, 2015 to December 31, 2025.

  1. Recipients of Temporary Assistance for Needy Families (TANF)
  2. Veterans
  3. Ex-Felons
  4. Designated Community Residents (DCR) 18-39 years of age
  5. Vocational Rehabilitation Referrals, Ticket to Work, Veteran Affairs
  6. Summer Youth
  7. Supplemental Security Income (SSI)
  8. Supplemental Nutrition Assistance Program (SNAP)
  9. Qualified Long-term Unemployed Recipient (LTUR)
  10. Long-term family assistance recipient (LTFAR)

Employers and agents who require assistance to understand the definitions for these target groups can check the federal website.

Assisting to understand the required documents

IRS form 8850 is used:

  1. To determine whether an applicant appears to fall into an eligible target group for the tax credit; AND
  2. To formally request that a State Workforce Agency (SWA) - in this case the Maryland Department of Labor - certify the applicant’s eligibility. This form should be presented to the employer on the day of the applicant’s job offer, interview, or prior to the interview.

Individual Characteristics Form (9061) - (for job seekers served by a SWA or where the process is initiated by the employer): This form is used in conjunction with the Prescreening Notice & Certification Request form to determine tax credit eligibility and request certification from the Maryland Department of Labor. Documentation supporting the individual’s eligibility must be submitted before this form can be processed and final certification issued.

IRS Form 9175 can be used for the Long-Term Unemployed

Conditional Certification Form (CC) 9062 – is used when an applicant has been pre-screened for WOTC by an SWA. When a SWA or participating agency (PA) determines that a job-ready applicant is, TENTATIVELY ELIGIBLE as member of a target group under WOTC, it shall use this required form, without modification, to show that eligibility pre-determination was made for this person.

Directions for completing these forms can be found on the federal website.

Participants are encouraged to submit all forms at once to expedite the process.

Employer Certification Form (9063) is issued by the Maryland Department of Labor following review of the appropriate above documents. This form constitutes final certification of a candidate's eligibility for the WOTC program.

Employers and Agents

When the job offer is made, all employer information must be completed on the Pre-Screening Notice & Certification Request Form (8850). The form, signed by both the applicant and the employer, must then be sent to the Maryland Department of Labor with a postmark on or before the 28th day of employment.

If the Individual Characteristics Form (9061) is used, it needs to be sent as soon as possible to the Maryland Department of Labor (preferably sent with the Pre-Screening Notice). This form needs to be attached to applicant eligibility documentation or specify what documentation will be sent.

Employer should be reminded to obtain IRS Form 5884 to claim the credit on their tax returns.
Once the employer receives certification, the employer should retain the certification as proof of eligibility to obtain credit.

Agents may offer assistance by applying online as outlined above or sending paper forms to the Maryland Department of Labor for the employer. The Certifying Agency, the Maryland Department of Labor, will provide final certification of a job seeker’s eligibility for the WOTC program.

  1. The Maryland Department of Labor will determine the job seeker’s eligibility after receiving the Pre-Screening Notice and either the Individual Characteristics Form (along with eligibility documentation).
     
  2. If eligibility is approved, the Maryland Department of Labor will then issue the Employer Certification Form to the employer.

ETA Form 9198 Employer Representative Declaration - declaring Employer Representative(s) with the State Workforce Agency (SWA) for employer WOTC certification requests. This form appoints the following person(s) as authorized employer representative(s).

If you have any questions, please contact wotc.labor@maryland.gov.