The Welfare-to-Work Tax Credit is a federal income tax credit that encourages employers to hire long-term welfare recipients who begin work any time after December 31, 1997, and before July 1, 1999.

The Welfare-to-Work tax credit is an important tool in a diverse toolbox of flexible strategies designed to help people move from welfare to work and eeconomic self-sufficiency. It joins the WOTC and other targeted tax credit and employment program initiatives that both help American workers and increase productivity and economic growth. More than 46,000 certifications were issued as a result of employers requests during the tax credit's first nine months of exixtence ending September 30, 1998.

What New Hires Can Qualify Employers For The Welfare-To-Work Tax Credit?

• The Welfare-to-Work Tax Credit applies to new hires who begin work after December 31, 1997, and before July 1, 1999, and are employed at least 400 hours or 180 days.

• The new hires must be long-term welfare recipients, either

• Members of a family that received Temporary Assistance for Needy Families (TANF) for at least the 18 consecutive months before date of hire, or

• Members of a family whose TANF eligibility expired under federal or state law after August 5, 1997, or

• Members of a family that received TANF for a total of at least 18 months, beginning after August 5, 1997,

• The Welfare-to-Work Tax Credit for new hires employed 400 or more hours or 180 days is 35% of qualified wages for the first year of employment and 50% for the second year.

• Qualified wages are capped at $10,000 per annum; they include tax-exempt amounts received under accident or health plans as well as educational assistance and dependent assistance programs.
  To discuss eligibity for Welfare-To-Work Tax Credit Call WRAP, Inc. at (708)339-9727