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How does an Employer Claim the WOTC Federal Income Tax Credit?

Once an employer receives the Employer Certification from Job Service North Dakota, the employer is authorized to pursue a WOTC tax credit on the new hire from the Internal Revenue Service (IRS). The target group for which the new hire was approved is listed on the Certification. That information is used when calculating the tax credit. In order to claim the WOTC on a new hire, the new hire must work at least 120 hours (exception: new hires verified for the Summer Youth target group must work at least 90 days between May 1 and September 15 of the hire year).

Read the Tax Credit Guidelines and Calculation Processes document for detailed information on the tax credit guidelines, examples of tax credit calculations, and IRS Form 5884 (Work Opportunity Credit), which is used to claim the tax credit.