Explanation:
The Recovery Act expands the Work Opportunity Tax Credit to create two new targeted groups of prospective employees: (1) disconnected youth; and (2) unemployed veterans.
- The Work Opportunity Tax Credit (WOTC) was reauthorized and enhanced in 2007 to allow employers to receive a credit of up to $4,800 for each new disabled veteran hired. Further, veterans who belong to a family that received Food Stamps for 3 of the past 15 months are considered "qualified veterans;" employers may receive a credit of up to $2,400 for each new qualified veteran hired. Veterans with a compensable service-connected disability qualified under the WOTC enhancement if:
- They enrolled within 12 months of discharge; or
- They had been unemployed for a total of 6 months within the past 12 months.
- The Recovery Act identifies "unemployed veteran" as another WOTC target group. Employers may receive a credit of up to $2,400 for each new unemployed veteran hired. An individual would qualify as an unemployed veteran if they:
- Served on active duty (other than training) for more than 180 days or was discharged for a service-connected disability;
- Were discharged during the five-year period ending on the hiring date; or,
- Received UI benefits for at least four weeks during the one-year period ending on the hiring date.
- The Recovery Act also expands the WOTC to target disconnected youth.
An individual qualifies as a disconnected youth if they:
- Are between the ages of 16 and 25; and,
- Have not been regularly employed or attended school in the past 6 months.
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