TAX CREDITS AND FIDELITY BONDING

There are two federal income tax credits that are available to local employers if they hire a member of one of several specific target groups. Eligibility requirements, the application process, and documentation can be confusing. A brief overview of these programs is offered here. Staff at any Job Center can provide answers. Members of our Employer Services Team will explain the programs if you contact us for any business services.

The Work Opportunity Tax Credit (WOTC)

This is a federal program that can save employers up to $2,400 each time they hire a member of one of eight targeted groups who have traditionally faced significant barriers to employment. This program applies to only new employees hired before January 1, 2006 who belong to one of the following groups who meet eligibility requirements.

• IV-A Recipients. A member of a family receiving Temporary Assistance to Needy Families (TANF) or Aid to Family with Dependent Children (AFDC) or a successor program.
• Veterans who have also been receiving food stamps.
• Ex-Offenders. Convicted of a felony, released within the last year and a member of a low-income family.
• High Risk Youth. Ages 18-24 and a resident of Milwaukee.
• Vocational Rehabilitation Referrals. Has a disability that is considered a barrier to employment and is referred upon completion of or while receiving rehabilitation services under a State plan or Department of Veteran Affairs plan.
• Summer Youth. 16-17 year old residents of Milwaukee.
• Food Stamp Recipients. 18-24 years old and a member of a family that has received food stamps for the past 6 months or has recently become ineligible for the program.
• Supplemental Security Income (SSI) Recipients

Welfare to Work Tax Credit (WtW)

This program can save employers up to $8,500 over a two-year period when they hire long term welfare recipients. Eligibility depends on length of time aid was received and date of hire.

Fidelity Bonding

Fidelity bonding is a business insurance policy that protects the employer in case of theft of money or property due to employee dishonesty. It’s a guarantee to the employer that the person hired will be an honest worker who may have hesitations hiring a potential employee with a questionable back ground to include but not limited to being an ex-offender, poor or bad credit record, and person lacking work history. Bonding insures the employer for any type of loss by theft forgery, larceny or embezzlement.

Fidelity Bonding is provided to any one not eligible for commercial bonding, at no cost to the employers or employees. This is not a bail bond or court bond for the legal system.

How to Apply

More detailed information can be found online at the Department of Workforce Development. Staff at a Job Center can explain eligibility requirements, identify IRS forms to submit and help sort through additional documentation requirements.