DECEMBER 05, 2007 - Employers who hire workers living in Gogebic, Marquette and Ontonagon Counties are in line for special federal tax credits.

"The Work Opportunity Tax Credit (WOTC) offers employers a federal tax credit of up to $2,400 for each worker they hire who is from 18 to 39 years of age and resides in a Rural Renewal County," Keith Cooley, director of Michigan's Department of Labor & Economic Growth, explained.

In Michigan, Gogebic, Marquette and Ontonagon are designated as Rural Renewal Counties because of population shifts that have occurred in the three counties.

In addition to hiring the workers, employers must also employ them for at least 120 hours in the first year of employment to claim a 25 percent credit or at least 400 hours to claim a 40 percent credit. In most cases, the WOTC is claimed on the first $6,000 in wages paid.

"The WOTC is not a tax deduction but a credit that comes right off the bottom line of what the employer may owe in federal taxes and any unused portion of this credit can be carried forward for up to 20 years," Cooley said.

The WOTC is available to private-for-profit employers who hire from nine targeted groups of workers that typically experience difficulty in finding employment. The groups are: 

• Short-term Temporary Assistance to Needy Families (TANF) recipients 
• Long-term TANF recipients - Veterans receiving food stamps and those with a service-connected disability 
• Food stamp recipients, ages 18 to 39 
• Vocational rehabilitation work plan participants 
• SSI recipients (supplemental security income) 
• Ex-felons convicted or released within one year of hire 
• Designated Community* residents, ages 18 to 39 
• Summer youth, 16-17, living in an EZ, RC or RRC and who perform services from May 1 - Sept. 15
  *Michigan's "designated communities" include an Empowerment Zone (EZ) and a Renewal Community (RC) in Detroit; an RC in Flint; and the Rural Renewal Counties (RRC) of Gogebic, Marquette and Ontonagon

To claim the credit, the employer and worker must complete two forms - IRS form 8850 (Prescreening Notice & Certification Request for the Work Opportunity Credit) and ETA form 9061 (Individual Characteristics Form).

Both forms must then be submitted to the state's Unemployment Insurance Agency (UIA), WOTC Unit, no later than 28 days from the worker's start date. UIA administers the WOTC program in Michigan.

Employers wanting more information and the program forms can call the agency's WOTC Unit toll-free number 1-800-482-2959 or use the Quick Link to WOTC from UIA's website, www.michign.gov/uia.

Read more Michigan Department of Labor & Economic Growth press releases.