What is the Work Opportunity Tax Credit and how does it benefit business owners?

By The Street (via TurboTax)

The work opportunity tax credit (WOTC) rewards businesses that hire workers from certain targeted groups who might otherwise be overlooked in the job market. Businesses of any size can claim the credit for as many eligible workers they employ.

The credit amount depends on several factors, including the eligible employee’s targeted group, wages, and number of hours worked. There’s also a maximum credit amount per employee, which runs from $1,200 to $9,600, depending on the employee’s targeted group and length of employment.

The WOTC is a nonrefundable federal tax credit. As a result, it can reduce your tax bill to $0, but it won’t trigger a tax refund if the credit amount is greater than your tax liability before the credit is applied.

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